World Markets Brave Higher, European Inflation Accelerates

Bikram Pandey
28 Feb, 2011
New York City

U.S. indexes trade higher after personal spending and income rose. Pending contracts of sale of U.S. homes rose in January. In Europe, inflation stayed above the target level of the central bank. Crude oil stayed high and financial budget in India estimated smaller deficit on a quicker growth.

[R]4:00 PM New York – U.S. indexes trade higher after personal spending and income rose, though less than expected. Pending contracts of sale of U.S. homes rose in January. In Europe, inflation stayed above the target level of the central bank. Crude oil hovered near the recent high and financial budget in India estimated smaller deficit on a quicker growth.[/R]

The U.S. indexes traded higher after personal income and expenditure rose in January and the index that tracks contracts to buy existing homes declined 2.8% in the month after a revised 3.2% decline in December.

Popular unrest in the Middle East and North Africa spreads to Oman and U.N. imposes sanctions on Gaddafi regime in Libya.

In merger deals, leverage buyout firm, Blackstone agreed to acquire Australia-based Centro's U.S. Malls for $9.4 billion and a JPMorgan fund contemplated to take a stake in fast growing micro blogging site Twitter that some pegged valued the company at $4 billion.

In earnings news, American Water Works fourth quarter net income increased 10.4% to $40.2 million. Interpublic Group quarterly net income soared 51% to $195 million. Public Storage net income in the quarter increased 3.3% to $121.4 million. Tenet Healthcare quarterly net income surged 252%.

Across the Atlantic, the European indexes rose as oil prices stabilized but tensions in the Middle East remained high. Euro area inflation rose 2.3% in January and German import price inflation slowed and French producer price inflation slackened. Swedish retail sales growth and producer prices dropped in the month.

The UK indexes traded lower after home prices in England rose and Irish retail sales fell in January. HP Enterprise Services won deal worth more than $400 million from Centrica. Tesco entered in a venture to develop shopping malls in China.

Stocks in Japan closed higher after reversing earlier losses as the yen strengthened and crude oil advanced. The benchmark index Nikkei gained 3.8% in the month. FujiFilm Holdings agreed to acquire bio-drug makers from Merck.

Stocks in China region closed higher on earnings expectations this week and higher earnings from property developers in Hong Kong. HSBC Holdings said net doubled to $13.2 billion in 2010. Sun Hung Kai said first-half net increased 36%.

Stocks in Mumbai trading closed higher after Finance Minister proposed a budget that included 17% increase in social spending and lowered corporate tax surcharge and provided incentives to infrastructure investment but relied on higher economic growth to pay for increased expenses.

Australian stocks decreased and markets were halted in the last hour of trading on a computer glitch. QBE Insurance said full-year net decreased 17% and underlying profit margin declined to 15%. QR National swung to a first-half net profit of $278 million. Downer EDI plans to raise capital after it reported a loss related to Sydney metro network.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased to 3.41% and on 30-year bond fell to 4.49%.

The U.S. dollar increased to $1.379 to a euro and fell against the Japanese yen to 81.90 yen.

Immediate delivery futures of Texas crude oil decreased 32 cents to $97.56 a barrel, for natural gas rose 0.03 cents to $4.04 per mbtu and gasoline prices decreased 0.99 cents to 272.96 cents a gallon.

In metals trading, copper prices increased 4.30 cents to $4.49 per pound, gold increased $0.60 to $1,409.50 per ounce and silver rose $0.81 to $33.74.