Global Markets Overview - 04/26/2012
FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
Surging shares of Apple and dovish words from the Federal Reserve chairman drove U.S. stocks higher for a second day and propelled the Nasdaq Composite to its biggest gain this year. The Dow Jones Industrial Average advanced 89.16 points, or 0.69%, to 13090.72.
The Standard Poor's 500-stock index and the tech-oriented Nasdaq, which are both heavily weighted toward Apple, posted larger gains. The S&P 500 rose 18.72 points, or 1.36%, to 1390.69 while the Nasdaq soared 68.03 points, or 2.30%, to 3029.63.
Apple jumped 8.9% to close at $610.00 a share after the technology bellwether reported fiscal second-quarter earnings and revenue that handily topped expectations. That helped to dispel fears of a potential slowdown in iPhone sales, and lifted technology stocks in the U.S. and around the world.
The gains gave Apple its biggest one-day jump since November 2008, helping it to erase most of its 11-day slide earlier this month. Apple saw its market capitalization surge by nearly $50 billion, adding the equivalent of Hewlett-Packard's entire market value to the company in just one session. Apple's earnings report helped Broadcom, a supplier to the iPhone, jump 6.1%.
That, in turn, made the tech sector the strongest performer on the S&P 500, on a day in which all 10 sectors of the index finished in positive territory. Also in focus, the Federal Reserve's policy-setting committee reaffirmed its commitment to keeping interest rates low at least through late 2014.
At an afternoon press conference, Fed Chairman Ben Bernanke said he wouldn't hesitate to support the economy with more easing, if need be. In economic headlines, U.S. durable-goods orders dropped 4.2% in March from the previous month, far below expectations. Excluding transportation, orders fell 1.1%.
EUROPEAN STOCK MARKETS
Most European stocks markets extended a rise for a second day Wednesday, led by banks such as BBVA SA, in the wake of solid results, while a halo effect from Apple Inc.'s surprisingly strong earnings boosted tech shares in the region.
The Stoxx Europe 600 index closed 1% higher at 256.96, extending gains as U.S. stocks rose in the wake of Apple results. The top gainer in the Stoxx Europe 600, Temenos Group AG, surged 18.7% after Barclays Capital lifted the Swiss information-technology firm to overweight from equal-weight and as UBS upgraded it to buy from neutral.
Elsewhere, banks gained ground across Europe. In Spain, BBVA rose 2.2% after the bank reported a slight decline in first-quarter profit, but still beat forecasts, and said it had met the European Union's capital requirements.
Bankinter SA surged nearly 7% after it reported a 1.8% increase in first quarter profit. Banco Santander SA rose 2.2%. The IBEX 35 index gained 1.7% to 7,118.90, further buoyed by Actividades de Construccion y Servicios SA, up 6.3%, and Abertis Infraestructuras SA, rising nearly 4%. In France, banks helped lift the CAC 40 index 2% to 3,233.46.
Societe Generale SA advanced 7.3%, BNP Paribas SA added 5.6% and Credit Agricole SA rose 5.9%. STMicroelectronics NV rose 1.8% after Societe Generale upgraded the stock to buy from hold.
Phone maker Alcatel-Lucent advanced 5.2% as investors cheered better-than-expected earnings from Apple Tuesday night. Chip-maker ARM Holdings PLC also keyed off Apple's success, rising 1.1% in London.
The FTSE 100 index settled 0.2% higher at 5,718.89, with gains capped by data that unexpectedly showed the British economy slipped into recession in first quarter. Miners were also higher in London. Vedanta Resources PLC rose 4.3%, Fresnillo PLC added 3.4% and Kazakhmys PLC was up nearly 3%. In Germany, Commerzbank AG, surged 5.2%, and Deutsche Bank AG rose 2.1%, supporting a 1.7% rise to 6,704.50 for the DAX 30 index.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets ended mixed Wednesday as some caution prevailed ahead of the U.S. Federal Reserve's policy-meeting outcome later in the global day, though strong results from Apple Inc. boosted technology firms in Tokyo and Taipei, while mainland property developers climbed on expectations Beijing may loosen its monetary policy.
Japan's Nikkei Stock Average ended up 1%, Taiwan's Taiex gained 0.9% and China's Shanghai Composite Index finished 0.8% higher. Hong Kong's Hang Seng Index dropped 0.2% and South Korea's Kospi slipped 0.1%.
A largely positive performance on Wall Street Tuesday and successful bond auctions in the euro zone aided sentiment in Asia, though investors refrained from taking aggressive risk positions, awaiting the outcome of the Federal Open Market Committee meeting later Wednesday.
In Taipei, shares of Hon Hai Precision Industry rose 2.4% and Foxconn Technology climbed 2.5%. In Seoul, Samsung Electronics added 1.7% and LG Display rose 1.9%, although the broader market ended lower.
Gains in Tokyo were also aided by a weakened yen. Among technology shares, Advantest Corp. rose 2.9% and Tokyo Electron gained 1.5%. Among other exporters, Nissan Motor rose 1.1% and robot-maker Fanuc added 2.7%.
Shares of mainland property developers climbed in Hong Kong despite the broader market weakness, with some analysts also anticipating further gains in the near term.
Among developers, Gemdale Corp. jumped 4% in Shanghai and China Vanke climbed 2.9% in Shenzhen. In Hong Kong, China Overseas Land & Investment climbed 2.4%, while China Resources Land soared 4.3%. But weighing on the Hang Seng Index, shares of Internet major Tencent Holdings tumbled 4.7% after a strong run recently.
COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Wednesday, although market activity was muted as investors kept to the sidelines ahead of the of the U.S. Federal Reserve's policy announcement and following news conference.
At the close, LME three-month copper was 0.7% higher at $8,205 a metric ton, while nickel led the complex, up 1.1% at $17,605/ton. Oil futures eked out a gain Wednesday after Federal Reserve officials reiterated plans to keep interest rates near zero for the next two years, a move seen as boosting the allure of commodities for investors.
Light, sweet crude for June delivery settled 57 cents, or 0.6%, higher at $104.12 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 96 cents, or 0.8%, higher at $119.12 a barrel.
Gold futures ended nearly flat, recovering from earlier losses as the Federal Reserve's latest statement didn't offer a clear course change in the central bank's monetary policy. The most actively traded contract, for June delivery, fell $1.50, or 0.1%, to settle at $1,642.30 a troy ounce on the Comex division of the New York Mercantile Exchange.