World Markets in Weekly Advance; Indexes in Wild Ride in India

Barry Randall
05 Oct, 2012
New York City

World markets extended gains for the second week and indexes in the U.S. and Europe advanced. On Friday, stocks on Wall Street opened higher but turned lower after the early euphoria of decline in jobless rate and hopes for Spanish bailout request receded.

[R]8:05 PM New York – World markets extended gains for the second week and indexes in the U.S. and Europe advanced. On Friday, stocks on Wall Street opened higher but turned lower after the early euphoria of decline in jobless rate and hopes for Spanish bailout request receded.[/R]

Stocks opened higher in New York after the release of better than expected unemployment rate and the prospect of Spanish bailout request.

For the week, the Nasdaq Composite Index increased 06% and the S&P 500 index gained 1.4%.

However, market sentiment slowly faded and stocks retreated in the afternoon. The latest monthly payroll report indicated a decline in jobless rate as employers added more part time workers. The report, the last unemployment data before the Presidential election only a month away, took on added significance.

September unemployment rate fell to a three- year low of 7.8% and total nonfarm payroll employment rose by 114,000.

The European indexes gained but after the market close Spain’s Prime Minister Mariano Rajoy confirmed that his government has not decided if and when to ask for a bailout from the euro zone and other lenders.

Rajoy, after a meeting with the leaders of France and Italy, said that Spain needs to all conditions and take steps in the best interest of Spain.

For the week, the CAC 40 index soared 3.2% and the DAX index added 1.9%.

In European economic news, the French economy is forecasted to grow 0.2% this year and Swiss economic growth outlook was lowered. German factory orders and Spanish output fell in August.

France Telecom plans to hire 4,000 employees in the next three years. Air Berlin said capacity utilization rose in September and Volvo signed letter of intent to divest plant in Spain.

In Asian markets, indexes in India were on a wild ride after a system malfunction on the National Stock Exchange that erased 16% value of the index. The CNX Nifty Index that tracks 50 stocks dropped to the lowest and recovered in eight seconds as regulators probe the cause of the decline.

National Stock Exchange said that orders entered by Emkay Global Financial Services Ltd totaling $126 million were responsible for the drop. However, market watchers also blamed the system malfunction at the exchange. Most stocks were halted for 15 minutes before the regular trading resumed.

For the week, the Nikkei index in Tokyo closed flat, the Sensex in Mumbai closed up 1.9% and the Hang Seng index in Hong Kong gained 1.4%.

Commodities, Bonds and Currencies

The yield on 10-year bond increased to 1.74% and on 30-year bond rose to 2.97%.

The U.S. dollar inched lower to $1.304 to a euro and decreased against the Japanese yen to 78.65 yen.

Immediate delivery futures of Texas crude oil fell $1.80 to $89.88 a barrel and Brent crude declined 56 cents to $112.07, futures of natural gas decreased 0.01 cents to $3.39 per mbtu and gasoline price traded higher 0.96 cents to 295.25 cents a gallon.

In metals trading, copper decreased 0.80 cents to $3.77 per pound, gold decreased $15.70 to $1,780.80 per ounce and silver decreased 52 cents to $34.59.