Market briefing: UK markets ended higher yesterday, recovering from their recent sell-off, amid a rally in financial sector stocks
Date
6/30/2016 6:40:36 AM
(MENAFN- ProactiveInvestors - UK) Proactive Investors, Wed
UK Market Snapshot
UK markets ended higher yesterday, recovering from their recent sell-off, amid a rally in financial sector stocks. HSBC Holdings, Barclays, Lloyds Banking Group and Hargreaves Lansdown jumped 1.3%, 3.4%, 7.4% and 8.9%, respectively. Legal & General Group climbed 7.9%, after it appointed Whitehall veteran, John Kingman, as the new group Chairman. Peer, Prudential gained 7.7%. Ocado Group advanced 8.6%, following a rise in its revenue and profit in the first half of the year. Homebuilders, Berkeley Group Holdings, Persimmon, Taylor Wimpey and Barratt Developments rose 1.5%, 2.6%, 5.4% and 7.5%, respectively. On the downside, gold miners, Randgold Resources and Fresnillo fell 0.9% and 2.3%, respectively, tracking losses in gold prices. Carnival shed 0.2%, after it projected downbeat earnings for the current quarter. The FTSE 100 gained 2.6%, to close at 6,140.4, while the FTSE 250 rose 3.6%, to settle at 15,503.1.
US Market Snapshot
US markets closed in the green yesterday, recuperating from their losses, led by gains in financial, energy and technology companies. Meanwhile, the US annualised GDP growth was revised higher at 1.1% in the first quarter of 2016. Exxon Mobil, Marathon Petroleum and Southwestern Energy surged 2.3%, 8.4% and 11.8%, respectively, amid a recovery in crude oil prices. Wells Fargo, JPMorgan Chase and Comerica gained 2.4%, 3.2% and 5.1%, respectively. Xencor rallied 32.1%, after it announced a deal with Novartis to collaborate on developing cancer therapies. Endo International soared 18.3%, after the US Patent and Trademark Office issued a patent for Vasostrict, its treatment for patients suffering from vasodilatory shock. Gilead Sciences added 5.2%, after its new Hepatitis C drug was approved by the US regulators. The S & P 500 gained 1.8%, to settle at 2,036.1. The DJIA rose 1.6%, to settle at 17,409.7, while the NASDAQ advanced 2.1%, to close at 4,691.9.
Europe Market Snapshot
Other European markets finished in positive territory yesterday, amid speculation that government officials would take necessary measures to prop up financial markets following Brexit-led rout. Italian lenders, Banca Popolare di Milano Scarl, Mediobanca and Unione di Banche Italiane jumped 5.6%, 5.8% and 9.0%, respectively, on the back of reports that the nation''s government is considering injecting 40.0 billion to its financial system. Nestle advanced 3.3%, after it announced that Ulf Mark Schneider would succeed its current Chief Executive Officer, Paul Bulcke. Total added 2.6%, after Qatar Petroleum selected the oil giant to develop the Al-Shaheen field for 25 years. Peers, Repsol and Subsea 7 gained 2.9% and 4.3%, respectively, on higher crude oil prices. The FTSEurofirst 300 index gained 2.4%, to close at 1,252.5. Among other European markets, the German DAX Xetra 30 rose 1.9%, to close at 9,447.3, while the French CAC-40 advanced 2.6%, to settle at 4,088.9.
Asia Market Snapshot
Markets in Asia are trading higher this morning, tracking overnight gains on Wall Street. In Japan, export-oriented stocks, Honda Motor, Toyota Motor and Sony have advanced 2.3%, 3.7% and 4.3%, respectively, amid weakness in the Japanese Yen. However, Idemitsu Kosan has plunged 8.3%, after news emerged that its founding family is opposing the company''s merger with Showa Shell Sekiyu, down 3.6%. Seven & i Holdings has slid 0.3%, following disappointing retail sales data from Japan in May. In Hong Kong, Dalian Wanda Commercial Properties has declined 4.9%, as its proposed buyout by Wang Jianlin can face obstacles after an asset management company stated that Wang''s offer is too low. In South Korea, Samsung Electronics and Lotte Shopping have gained 0.7% and 3.0%, respectively. The Nikkei 225 index is trading 1.4% higher at 15,543.7. The Hang Seng index is trading 0.6% up at 20,299.2, while the Kospi index is trading 1.4% higher at 1,963.5.
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.54% or $0.26 higher at $48.84 per barrel, ahead of the Energy Information Administration''s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 3.01% or $1.42, to settle at $48.58 per barrel, after the American Petroleum Institute disclosed that US crude oil inventories dropped more than anticipated by 3.9 million barrels for the week ended 24 June 2016.
Gold
At 0330GMT today, Gold futures contract is trading 0.25% or $3.30 higher at $1321.20 per ounce. Yesterday, the contract declined 0.35% or $4.60, to settle at $1317.90 per ounce, amid a rebound in global equity markets.
Currency
At 0330GMT today, the EUR is trading marginally lower against the USD at $1.1062, ahead of the German consumer prices for June, due to release today. Also, GfK consumer confidence data in Germany for July along with Euro-zone''s business climate indicator and consumer confidence for June will attract a lot of market attention. Yesterday, the EUR strengthened 0.36% versus the USD, to close at $1.1065.
At 0330GMT today, the GBP is trading 0.24% lower against the USD at $1.3312. Investors will also closely monitor the release of today''s core annual Personal Consumption Expenditure (PCE) figures for May in the US. Yesterday, the GBP strengthened 0.90% versus the USD, to close at $1.3344, reversing its losses from previous session.
Fixed Income
In the US, treasury yields ended mostly unchanged. Yesterday, yield on 10-year notes remained unchanged at 1.46%, while yield on 2-year notes also remained flat at 0.61%. Meanwhile, 30-year bond yield fell 1 basis point to 2.27%.
Key Economic News
UK CBI distributive trade survey''s retail sales balance declined in June
The CBI distributive trade survey''s retail sales balance in the UK registered a drop to 4.00% in June, compared to a level of 7.00% in the prior month.
Draghi calls for global policy alignment
At the European Central Bank (ECB) conference in Portugal, the ECB President, Mario Draghi, urged major central banks to better coordinate their policies to tackle the shared problem of ultralow inflation, as global economies become more integrated.
German import price index advanced more than expected in May
In Germany, the import price index advanced 0.90% on a MoM basis in May, higher than market expectations for an advance of 0.60%. The import price index had registered a drop of 0.10% in the previous month.
German import price index fell less than expected in May
In May, on an annual basis, the import price index recorded a drop of 5.50% in Germany, compared to a fall of 6.60% in the prior month. Markets were expecting the import price index to drop 5.80%.
French consumer confidence registered a drop in June
Consumer confidence recorded a drop to 97.00 in France, in June, compared to a level of 98.00 in the previous month.
Italian consumer confidence index dropped unexpectedly in June
The consumer confidence index in Italy fell unexpectedly to 110.20 in June, compared to market expectations of a steady reading. In the previous month, the consumer confidence index had registered a revised reading of 112.50.
Spanish retail sales advanced in May
In Spain, retail sales rose 2.30% in May on an annual basis. Retail sales had risen by a revised 4.00% in the previous month.
US GDP price index rose less than expected in 1Q 2016
In the US, the final gross domestic product price (GDP) index registered a rise of 0.40% in 1Q 2016 on a QoQ basis, compared to an advance of 0.90% in the previous quarter. Markets were anticipating the GDP price index to advance 0.60%. The preliminary figures had indicated a rise of 0.60%.
US annualised GDP advanced more than expected in 1Q 2016
On a quarterly basis, the final annualised GDP in the US, advanced 1.10% in 1Q 2016, higher than market expectations for a rise of 1.00%. The preliminary figures had indicated a rise of 0.80%. In the prior quarter, the annualised GDP had recorded a rise of 1.40%.
US Redbook index rose in the last week
On an annual basis, the Redbook index in the US advanced 0.50% in the week ended 24 June 2016. The Redbook index had registered a rise of 0.90% in the prior week.
US personal consumption rose less than expected in 1Q 2016
In 1Q 2016, on a QoQ basis, the final personal consumption in the US recorded a rise of 1.50%, compared to an advance of 2.40% in the prior quarter. The preliminary figures had recorded an advance of 1.90%. Markets were expecting personal consumption to climb 2.00%.
US S & P/Case-Shiller composite index of 20 metropolitan areas rose less than expected in April
On a monthly basis, in April, the seasonally adjusted S & P/Case-Shiller composite index of 20 metropolitan areas advanced 0.45% in the US, compared to a revised rise of 0.81% in the prior month. Markets were anticipating the S & P/Case-Shiller composite index of 20 metropolitan areas to advance 0.58%.
US S & P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas rose more than expected in April
In April, the S & P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas in the US, registered a rise of 5.44% on an annual basis, higher than market expectations for an advance of 5.41%. The S & P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas had advanced by a revised 5.48% in the prior month.
US CB consumer confidence index climbed in June
In June, the CB consumer confidence index registered a rise to 98.00 in the US, higher than market expectations of a rise to a level of 93.50. In the previous month, the CB consumer confidence index had registered a revised level of 92.40.
US S & P/Case-Shiller home price index advanced in April
In April, the S & P/Case-Shiller home price index rose to a level of 186.63 in the US, compared to a revised level of 184.58 in the previous month. Markets were expecting the S & P/Case-Shiller home price index to advance to a level of 186.71.
US Richmond Fed manufacturing index declined unexpectedly in June
The Richmond Fed manufacturing index registered an unexpected drop to -7.00 in June, in the US. The Richmond Fed manufacturing index had registered a reading of -1.00 in the previous month.
US core personal consumption expenditure advanced less than expected in 1Q 2016
In 1Q 2016, the final core personal consumption expenditure in the US registered a rise of 2.00% on a QoQ basis, lower than market expectations for an advance of 2.10%. In the prior quarter, core personal consumption expenditure had risen 1.30%. The preliminary figures had indicated an advance of 2.10%.
US Redbook index eased in the last week
On a MoM basis, the seasonally adjusted Redbook index dropped 0.90% in the week ended 24 June 2016, in the US. The Redbook index had registered a similar fall in the previous week.
Japanese large retailer''s sales declined in May
On a MoM basis, large retailer''s sales eased 2.20% in Japan, in May. In the previous month, large retailer''s sales had fallen 0.80%.
Japanese retail trade remained flat in May
Retail trade in Japan remained unchanged on a MoM basis in May, compared to a revised fall of 0.10% in the previous month. Markets were anticipating retail trade to remain flat.
Japanese retail trade fell more than expected in May
In May, on an annual basis, retail trade dropped 1.90% in Japan, higher than market expectations for a fall of 1.60%. In the prior month, retail trade had dropped by a revised 0.90%.
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