Oil, Copper at 2015-Low; Asian Investors Cast Doubts on Propped Up Euro

Nichole Harper
07 Jul, 2015
New York City

Crude oil, natural gas, coal and copper trade at 2015-low after Chinese stocks extended losses in the third week. The ongoing turmoil in the euro zone also weighed on the world market sentiment. Asian investors worry that European bias is propping up the euro.

[R]1:40 PM – Crude oil, natural gas, coal and copper trade at 2015-low after Chinese stocks extended losses in the third week. The ongoing turmoil in the euro zone also weighed on the world market sentiment. Asian investors worry that European bias is propping up the euro.[/R]

U.S. stocks fell sharply at the open and extended losses in the next three hours of trading when widely followed indexes dropped 1% before trimming losses in early afternoon.

Copper, oil, natural gas iron ore and coal dropped to 2015-lows after the ongoing decline in Chinese stocks extended in the third week with major indexes down more than 27% in the period.

What happens in China has more global impact and especially on commodities markets and the recent plunge in Chinese market indexes has knocked off prices of most traded commodities.

In addition, ongoing turmoil in the euro zone has also dented sentiment in world financial markets. European leaders have been unable or unwilling to solve the growing chaos in Greece and the struggling nation is expected to run out of money as early as tomorrow.

However, investors have been forgiving to the turmoil in the euro zone and the euro has largely held up against the market volatility.

Many investors in Asia feel that European and U.S. investors have double standards when it comes to the euro. If similar chaos persisted in a country in Asia, European investors would have knocked off the currency by more than 25%.

U.S. trade deficit in May widened $1.2 billion to $41.9 billion from the revised $40.7 billion in April. Exports in May fell $1.5 billion and imports slid $0.3 billion from April, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index decreased 0.9% or 100.54 to 10,555.96.

S&P 500 index slid 0.9% or 18.91 to 2,049.85 and the Nasdaq Composite Index fell 1.5% or 73.66 to 4,917.46.

Crude oil in New York slipped 55 cents to $51.98 a barrel and gold plunged $19.60 to $1,155.60 an ounce.

U.S. Movers

Advanced Micro Devices, Inc ((AMD)) tumbled 17.5% or 43 cents to $2.04 after the microprocessors maker said revenue for the second-quarter ending on June 27 to decline 8% from the previous guidance of 3% decrease on ""weaker than expected consumer PC demand.”

Horizon Pharma Plc ((HZNP)) slumped 2.6% or 89 cents to $33.65 after the Ireland-based biopharmaceutical company propose to acquire Depomed, Inc. for $29.25 per share in an all-stock, tax-free exchange valued at about $3 billion, represents a premium of 42% to the closing price of July 6.

European Markets

Total production output in May jumped 2.1% from a year ago month, Office of the National Statistics in London, U.K. said.

In London trading, FTSE 100 index decreased 0.2% or 10.32 to 6,525.03 and in Frankfurt the DAX index slid 0.4% or 38.56 to 10,852.19.

In Paris, CAC 40 index fell 0.6% or 29.69 to 4,682.92.

Air Berlin Plc was halted at €1.13 after the Germany-based airline company said total passengers traffic in June declined 7% to 3,023,700, capacity declined 8.5% and revenue passenger kilometers plunged 10% to 4.360 billion from a year ago month.

Monthly available seat kilometers slumped 9.5% to 5.216 billion from June 2014 and the capacity utilization rate edged down 0.4 percentage points to 83.6%.

The total number of passengers for the year decreased 4.1% from a year ago to 14,035,619.

Axel Springer SE jumped 3.5% to €48.94 after Wall Street Journal said the Germany-based publishing company and broadcaster ProSiebenSat.1 AG are in talks to merge their businesses with a combined market capitalization of about €14.4 billion or $16 billion.

Marks and Spencer Group Plc slipped 1.1% to 541 pence after the specialty retailer said its full-year outlook remains unchanged as it reported group sales for the quarter ending on June 27 increased 1.8% and international sales increased 0.7%.

Asian Markets

Nikkei average rebounded a day after Greek historic no vote as investors focused on domestic and regional economic news.

Seven & I forecasted net sales in first-half to jump 5%. Dentsu gained after reporting better-than-expected sales in June.

Nikkei average in Tokyo rebounded after investors looked ahead after historic no vote in Greece and focused on the domestic and regional economic development.

The Nikkei 225 Stock Average jumped 264.47 or 1.3% to 20,376.59 and the broader Topix index increased 16.87 to 1,637.23.

The yen closed at 122.69 against a dollar.

Seven & I Holdings Co., Ltd jumped 2.4% to 5,393 yen after the convenience stores operator reported net sales in the first-quarter ending in May fell 2.1% to 1.44 trillion yen from 1.47 trillion yen in a year ago period.

Net income in the year climbed 6.9% to 42.23 billion yen compared to 39.52 billion yen and diluted earnings per share increased to 47.72 yen from 44.67 yen in the same period a year ago.

The convenience stores operator forecasted net sales in the first-half ending in August to jump 5.2% to 3.16 trillion yen and net income to climb 10.8% to 93 billion yen.

Seven & I forecasted net sales in the year to increase 6% to 6.40 trillion yen and net income to surge 11.6% to 193 billion yen.

Stocks in Mumbai declined and the two widely followed indexes closed down in choppy trading.

Rupee strengthened 6 paisa to 63.46 against one U.S. dollar.

The Sensex Index fell 37.07 to close at 28,171.69. The CNX Nifty slid 11.35 to 8,510.80.

Reliance Industries plans to sell 3.1% stake in Network18 and IRB Infra won an order worth ₹2,650 crore or $400 million from the National Highways Authority of India.

Sterlite Tech secured an order of $1.1 in defense sector.