Global Markets Overview - 19 February 2013
With U.S. markets closed for a holiday on Monday for President's Day, European stock markets ended low but Asia-Pacific markets hit higher notes led by Japan now avoiding criticism on a weakening yen.
EUROPEAN STOCK MARKETS, BONDS
European stock markets fell Monday, with shares of Carlsberg AS among the biggest decliners after a disappointing earnings report.
The Stoxx Europe 600 index lost 0.2% to close at 286.76, losing ground for a third straight day. Shares of Carlsberg AS slumped 5.8% after the Danish brewer said market dynamics in 2013 are expected to be similar to those of 2012, while posting a fourth-quarter result below expectations.
Shares of Telefonica SA fell 1.1%. The telecom firm said late Friday that it will take a EUR438 million hit on its 2012 earnings to reflect the impact of Venezuela's recent currency devaluation.
On an upbeat note, shares of Natixis jumped 22.5% as the French bank said it plans to sell holdings valued at EUR12.1 billion to simplify its structure.
That will create an exceptional distribution to the shareholders of EUR2 billion. Additionally, Citigroup lifted the bank to buy from neutral.
The broader European market failed to take inspiration from an upbeat mood in Asia. In the same vein, the euro slipped to $1.3348 after European Central Bank President Mario Draghi in remarks to the European Parliament committee repeated that the euro's exchange rate is an important factor, but not a policy target.
German shares rose after the Bundesbank said in its monthly report that Germany will avoid recession and return to growth in the first quarter of 2013, with an improvement in the industrial sector supporting the recovery.
Data showed last week that the German economy--Europe's largest--contracted 0.6% in the fourth quarter of 2012.
The DAX 30 index gained 0.5% to 7,628.73. Shares of Deutsche Lufthansa AG gained 1.7% as Deutsche Bank lifted the airline to buy from hold.
Daimler AG added 1.1% after UBS added the car maker to its most preferred list. Shares of BMW AG slipped 0.4% as UBS cut the firm to neutral from buy.
The FTSE 100 index closed 0.2% lower at 6,318.19. Shares of Anglo American lost 2.8% after the miner said a total of 12 workers and security personnel were injured with rubber bullets at an Anglo American Platinum Ltd.'s South Africa mine. Anglo American holds a majority stake in Anglo American Platinum. France's CAC 40 index closed 0.2% higher at 3,667.04. Oil group Total SA rose 0.4%, while BNP Paribas SA fell 1.4%. Shares of Accor SA lost 2.5%, falling as Deutsche Bank cut the hotel operator to sell from hold.
ASIA-PACIFIC STOCK MARKETS, BONDS
Asian markets were mostly higher Monday, with Japanese stocks surging after Japan avoided criticism over the weakening yen at the Group of Twenty or the G20 meeting over the weekend, while strong earnings helped the Australian market touch a fresh multi-year high.
The G20 meeting, held in Moscow, ended with its members pledging to refrain from targeting their currency policies to gain a competitive advantage.
Most significantly for Asia, Japan was not singled out for the recent volatility in the yen's exchange rate. The Japanese yen started to depreciate sharply late last year on expectations that the new government would implement aggressive monetary policy.
A weaker yen gave Japanese stocks a strong start, with the Nikkei Stock Average up 2.1% at 11407.87.
Banks and real estate firms led gains, with Mitsubishi UFJ Financial Group rising 4.9% and real estate firm Mitsui Fudosan adding 3.8%.
Exporters were also higher with Honda Motor climbing 1.5% and Toyota Motor Corp. gaining 1.3%. Stocks in mainland China were lower on the first day of trading in the year of the snake, with the Shanghai Composite Index closing 0.5% lower at 2421.56, after closing for a week-long public holiday.
In Hong Kong the Hang Seng Index, which started last Friday, was down 0.3% at 23381.94. South Korea's Kospi Composite rose less than 0.1% to 1981.91.
COMMODITIES
Base metals on the London Metal Exchange closed sharply lower Monday, extending early gains after a stronger dollar and downbeat sentiment from China weighed on the complex throughout the session. At the close of open-outcry trading, copper was 1.0% lower from Friday's settlement at $8,119 a metric ton. Nickel led the declines, closing 2.9% lower at $17,855/ton.