Japan Rises, Lacks Direction

Ivaylo
03 Aug, 2006
New York City

Asian markets closed mixed Thursday, as investors were cautious before a key U.S. data report on Friday. Investors are awaiting the nonfarm payrolls for July which should provide clues to next discussion of U.S. monetary policy on Tuesday at the Federal Open Market Committee meeting.

[R]7:30AM Asian markets ended mixed ahead of U.S. and Japan economic data.[/R]
Asian markets ended mostly mixed on Thursday. The Nikkei 225 Index gained slightly, advancing 0.04% to close at 15470.37. Retailers, seafood industry stocks, and some electronics issues climbed. Fast Retailing added 1.4%, and Nippon Suisan Kaisha jumped 6.3%. Among electronics stocks, Canon nudged 0.9% while Sony shed 0.4%. Marine transport stocks offset gains, with Mitsui O.S.K. Lines plunging 1.6%.

Hong Kong shares closed slightly higher as a gain in HSBC supported the benchmark index. The Hang Seng Index advanced 0.1% to 17048.42, though gains were limited due to the concerns over the FOMC meeting. Other advancers included China Construction Bank which climbed 2.4%, Bank of Communications rising 1.9% and Bank of China gaining slightly 0.6%.

South Korea’s Composite Stock Price Index, or Kospi, fell 0.2% to 1292.05, as shares closed lower on institutional selling and caution ahead of the Fed meeting, with bank and telecom shares leading the decline. Taiwan markets closed slightly while digesting news of slow progress in cross-strait relations. Shares in China were flat for the second day running, as advances in banks were offset by concerns about the impact of a wave of new initial public offerings. Shares in Australia, New Zealand and Singapore climbed.

[R]6:30AM Europe markets lower on expectation of ECB rate call.[/R]
European markets were lower Thursday morning. London’s FTSE 100 shed 0.6% to 5,898.2, while Frankfurt’s Xetra Dax slipped 0.8% to 5,638.20 and in Paris, the CAC 40 dropped 0.6% to 4,997.17. Earnings were again the focal point in Europe, and the oil sector suffered as French producer Total, reporting a 16% rise in second-quarter net profit, fell just shy of market expectations and its shares fell 1.5%.

Finnish refiner Neste Oil lost 6.2% unexpectedly reporting weak second-quarter operating profit.. Numico sank 2.8% as better-than-expected second-quarter earnings were overshadowed by sales that sank just shy of expectations and Danone, posting record first-half sales on Wednesday, shed 0.9% while Swiss group Nestle shed 1.9%.

Financial stocks gained as Société Générale, said net profit in the second quarter climbed nearly 38%, topping forecasts on strong growth in its investment banking operations. The shares climbed 0.2% and the UK’s Barclays too said that booming investment banking growth led to a better-than-forecast 37% rise in first-half profits lifting its shares 1.1%.

Oil prices rose slightly Thursday morning after a jump the day before on news that U.S. crude and gasoline inventories had fallen, and a tropical storm was gaining strength in the Caribbean. Light sweet crude for September delivery was up 4 cents to $75.85. London ICE Brent crude was trading 22 cents lower at $76.67 by 0915 GMT on Thursday.

Gold traded at $646.50 an ounce, down $2.20 an ounce from Wednesday. The euro lost ground against the U.S. dollar ahead of Thursday''s European Central Bank interest rate decision. The euro bought $1.2760 in early European trading, down from $1.2798 in New York late Wednesday. The British pound dropped to $1.8746 from $1.8779. The dollar also climbed to 114.76 Japanese yen from 114.55 yen.

[R]5:00AM Gold, silver continue to rise due to the Middle East and the weak dollar[/R]
The most-traded December gold ended $5.30 higher at $664.10 a troy ounce, down slightly from the day''s high at $668.20. September silver finished up 50.5 cents at $12.245 an ounce. October platinum closed up $2.10 at $1,260.60 an ounce and September palladium finished up $7 at $328.95 an ounce. September copper settled down 0.2 cent at $3.5910 per pound.

The September crude-oil contract ended up 90 cents at $75.81 after rising as high as $76.50 earlier. September gasoline finished up 6.15 cents at $2.3377 a gallon and September natural gas gained 22.5 cents to settle at $7.799 a million British thermal units. Arabica coffee futures rallied to one-month highs. September ended 5.40 cents higher at $1.0370 a pound and December gained 5.30 cents to $1.0775 a pound. October futures for raw sugar in foreign ports lost 0.37 cent at 14.53 cents a pound.