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15.08.2011 06:13

STOCKS: Weekly review

Asian stock markets ended the week significantly lower.
By the end of the week the Japan’ Nikkei 225 fell by 3.61% to 8,963.72.
The Hong Kong’ Hang Seng shed 6.33% to 19,620.
The Australia’ S&P/ASX 200 closed higher 1.64% at 4,173.
The China’ Shanghai Composite Index dropped by 1.27% to 2,593.
Last week stock market dynamics in Asia mostly coincided with the mood of U.S. markets day before. First, the markets sharply fell amid U.S. credit downgrade by rating agency S&P. Then there was concern that the same international agency may downgrade debt rating of France, the  second largest economy in Europe behind Germany. Another pressure was decision of the Federal Reserve to keep rates low through mid-2013.
In the second half of the week Seoul’ stocks gained after the government there banned short-selling for three months, in the wake of extreme losses.
Japanese exporters declined as the dollar dropped below the 77-yen mark (Panasonic Corp., Sony Corp., Nissan Motor Co.).
The Shanghai Composite index suffered losses as the country's consumer price index rose to a higher-than-expected 6.5% in July from a year earlier and above the 6.4% rate in June. But market participants said they don't expect Beijing to launch further tightening measures given the tumultuous global markets.

Most European markets also suffered losses.
By the end of the week the pan-European FTSEurofirst 300 index tumbled 0.70% to 968.21.
The Britain's FTSE 100 added 1.39% to 5,320.03.
The Frence’ CAC 40 decreased by 1.97% to 3,213.88.
The Germany’ Xetra DAX fell by 3.82% to 5,997.74.
European stocks dropped to their lowest level since August 2009 as Standard & Poor’s downgraded the U.S. sovereign debt rating. Then markets rebounded as the European Central Bank started to purchase Italian and Spanish debt in an attempt to curb the nation’s surging borrowing costs and prevent the crisis spreading further.
The next substantial factors to fall were worries about the French bank Societe Generale, France's second-largest bank, and concern that France, the second largest economy in Europe after Germany, may face a rating cut even though the major rating agencies have reiterated France's AAA rating. These news fueled concerns about EU debt crisis.
The markets buoyed by data showed an unexpected drop in weekly jobless claims in U.S.
Another support received from decision by France, Italy, Spain and Belgium to ban naked short-selling for 15 days.
Last week Egan-Jones ratings agency downgraded France's AAA rating. However, market participants didn’t attach importance to the lowering.
As a result, banking shares were very volatile and ended the week mostly lower. Market players especially focused on BNP Paribas, Societe Generale and Credit Agricole in Paris, UniCredit SpA and Intesa Sanpaolo in Milan, Banco Santander in Madrid.
In Frankfurt shares of E.On AG and RWE AG declined due to Germany’s plan to shut down some its nuclear power stations.

"Blue Chips" were unable to recoup their weekly losses.
At the end of the week the S&P 500 sang by 1.72% to 1,178.81.
NASDAQ Composite closed the week lower by 0.96% at 2,507.98.
Dow Jones Industrial Average tumbled 1.53% to 11,269.00.
The markets have been plummeting down on concerns over slowdown in economic recovery of US and Europe for all last week.
On Monday U.S. stocks tumbled, extending the biggest slump for the Standard & Poor’s 500 Index since 2008’s bear market, amid concern that a downgrade of the nation’s credit rating by S&P may worsen an economic slowdown. It was a roller coaster ride for U.S. markets, jumping 3-6% per day. Dow Industrial changed between 400 and 600 points every day excluding Friday.
Financial stocks led the sell-off in U.S markets, as investors worried that problems in the European banking sector could spillover into the U.S. banks.
The markets were supported amid calming concerns in European markets, strong corporate earnings of such large companies as Cisco Systems (CSCO), encouraging data on US labor market, slowing rise in June business inventories and beating July data on retail sales.
The markets went up even despite dropping Reuters/Michigan consumer sentiment index. The August index is at 54.9 versus estimated 63.2 and previous figure of 63.7, lowest level since 1980.
In spite of significant rebound on Friday, all S&P groups excluding conglomerates sustained losses this week. On the week the U.S. financial sector fell by 2.5%. Bank of America (BAC) lost 12%, JPMorgan Chase (JPM) sang by 4.5%, Morgan Stanley (MS) - 16%.
AOL Inc.’ (AOL) shares tumbled 27% despite the internet company authorized a $250 million stock buyback.
Dow component Cisco Systems Inc (CSCO) jumped 7% on the week as the company reported better-than-expected fiscal Q4 results on profit and sales and forecast the current quarter higher than expected as well.
Shares of News Corp. (NWSA) soared 11% on the week amid beating earnings and sales expectations despite recent phone-hacking allegations.
Shares of the world’s biggest theme-park operator Walt Disney Co. (DIS) sang 6% on the week as it posted a weak third-quarter studio revenue of $1.62 billion, compared with the average analyst estimate of $1.83 billion.
Shares of Molycorp Inc. (MCP) added 9% on the week as the company posted higher than expected Q2 earnings of $0.52 per share versus estimated $0.40.

15.08.2011 06:27

Gold weakens

15.08.2011 05:45

FOREX: Weekly review

Market Focus

  • The eurozone started the third quarter on a solid footing, according to PMI survey data
  • Earnings Season in U.S.: Major Reports of the Week
  • German private sector output growth slowed for the second month running in July
  • ECB's Mersch says as conditions normalise, it is unlikely that uncoventional policies will remain necessary
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