Japan Inches Up

Ivaylo
27 Jun, 2006
New York City

As many investors expect the Fed to raise U.S. interest rates by a quarter percentage point to 5.25%, they will be watching for any clues about the course of future policy. The merger activity also affected the market, with Arcelor and Mittal deal showing that there will be a continuing wave of consolidation in the sector.

[R]7:15 AM Asian markets finished mixed, Japan gains slightly.[/R]
Asian markets ended mixed Tuesday. The Nikkei 225 Index rose 0.13% to 15171.81, with steel shares continuing Monday''s rise on news of the likely merger between Arcelor and Mittal Steel. The merger is expected to accelerate the continuing wave of consolidation in the global steel industry. Japan steelmaker Nippon Steel was among the gainers, adding 1.92%. JFE Holdings also rose 2.84% and Sumitomo Metal Mining gained 3.23%. Hong Kong stocks closed slightly down as investors waited on the Fed''s decision. The Hang Seng Index shed 0.19% to 15774.70. Hong Kong follows U.S. monetary policy because its currency is pegged to the U.S. dollar. South Korean and Taiwan shares led regional gainers, as both indexes advanced 0.8%. The Korea Composite Stock Price Index, or Kospi, advanced to 1247.54, extending the previous session''s gain. Taiwan stocks also gained, ending up at 6572.39, as legislators failed to approve an opposition-led effort to hold a referendum to oust the president. China''s shares ended higher Tuesday. The Shanghai Composite Index advanced 0.4% to 1639.55. The Shenzhen Composite Index gained 0.2% to 424.66. Australia''s S&P/ASX advanced 0.7% at 5000.50, while New Zealand''s NZX 50 Index gained 0.7% to 3613.417.

[R]6:30AM Europe erases early gains.[/R]
European markets rose slightly in mid-morning trade. London’s FTSE 100 gained 0.1 %to 5,685.3, while Frankfurt’s Xetra Dax was unchanged at 5,514.46 and the CAC 40 in Paris climbed 0.1% to 4,806.5. On the corporate front, Banca Monte dei Paschi di Siena advanced 1.5% after it announced it was looking to integrate with Finsoe, the holding company which owns a controlling stake in Italian insurer Unipol. Anglo Irish Bank climbed 1.3% as recent losses presented investors with a good buying opportunity. Oil stocks added some weight to European gains. Overnight, US crude advanced to $72 a barrel for the first time in two weeks on fears that increasing demand for gasoline would sap US stockpiles. France’s Total advanced 0.9%, while Norway’s Statoil added 2.1%. France’s Suez climbed 1.2% after the utility was upgraded by UBS from “neutral” to “buy”.

Crude oil advanced 51 cents at $72.31 a barrel by 0930 GMT, reaching a two-week high after rising 93 cents on Monday. London Brent crude advanced 52 cents to $71.24. Gold in London traded at $587.70 per troy ounce, up from $579.20 late Monday. The dollar gained against the European currency. The euro traded at $1.2578, down from $1.2580 late Monday in New York. The greenback bought 116.36 Japanese yen, up from 116.28. The British pound traded at $1.8223, down from $1.8234.

[R]5:15AM Gold and silver close almost unchanged on Monday.[/R]
The August gold contract ended 30 cents lower at $587.70 a troy ounce. The contract moved slightly into positive territory to reach a session high of $589.50 an ounce for the day session but was unable to hold onto gains. The most-active July silver contract followed gold''s lead and finished lower on the day at $10.24 an ounce, down 4.5 cents. July platinum closed $14.40 higher at $1,181.30 an ounce and September palladium finished $10.75 higher at $320.55 an ounce. The most-active September copper contract ended up 8.20 cents at $3.230 per pound.

August crude oil advanced 93 cents to $71.80 a barrel. July gasoline rose 5.12 cents to $2.1788 a gallon. On the New York Board of Trade, Arabica coffee futures managed to hold above its recent nine-month low at 94.50 cents a pound. Futures on raw sugar in foreign ports for July closed up 0.31 cent at 15.76 cents a pound while October advanced 0.38 cent to 16.31 cents a pound.