Gold, Oil Rise; Manufacturing Decline

123jump.com Staff
02 Jan, 2008
New York City

U.S. stock averages lose nearly 1% after a weak manufacturing report for the month of December. Oil crossed $98 a barrel and gold traded above $850 level. Nasdaq led the decline in indexes with a loss of 1.5% followed by losses in Dow of 1.2% and in S&P 500 of 1.1%. Amazon.com rose 4% after an analyst at Citigroup raised its rating.

[R]11:00AM New York – U.S. stocks lost its earlier gains after the manufacturing report and rise in oil and commodities prices.[/R]

Dow Jones Industrial Average fell 117.05 to 13,151.86, Nasdaq declined 14.18 to 2,638.10, and S&P 500 lost 8.98 to 1,459.38.

The manufacturing index published by the Institute of Supply Management fell to 47.7 in December from 50.8 in November. The index level below 50 suggests a decline in manufacturing activity. The index of prices paid by manufacturers rose to 68 from 67.5.

Market averages quickly changed its course and lost their gains in the first 30 minutes of trading to losses.

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2007 was estimated at a seasonally adjusted annual rate of $1,165.1 billion, 0.1% above the revised October estimate of $1,163.6 billion. The November figure is 0.1% below the November 2006 estimate of $1,166.3 billion. During the first 11 months of this year, construction spending amounted to $1,076.2 billion, 2.5% below the $1,103.9 billion for the same period in 2006.

Amazon.com ((AMZN)) gained $3.62 to $96.26 after an analyst at Citigroup revised rating on the company to ‘buy’ from ‘hold’.

Oil jumped $2.00 to $97.98 a barrel, gold surged $12.60 to $850.60, corn front month futures rose 2.6%, and wheat front month futures increased 3.4%.

Restaurant stocks declined in the morning trading after investors worried that rising oil prices will hurt consumer spending. Cheesecake Factory ((CAKE)) fell $1.61 to $22.08, Darden Restaurants Inc declined 74 cents to $26.97, and P F Chang’s China Bistro fell $1.02 to $21.82.


[R]10:00AM New York, 7:30PM Mumbai - Sensex stocks opened the year with a rise of 0.80%.[/R]

The 30-share BSE Sensex index closed up 0.8% to 164.59 at 20,465.30. During the day, the index traded in a range of 450 points.

The broader CNX S&P Nifty was up 0.8% or 35.05 at 6179.40. Banking stocks rebounded from earlier loses while software shares were subdued.

Of the stocks traded on the BSE, 1,974 shares advanced on the Bombay Stock Exchange 934 shares fell, and 13 remained unchanged. Turnover on BSE amounted to 10,984 crore rupees while turnover on the National Stock Exchange was at 22,655 crore rupees.

Of the Sensex shares, 16 advanced while the rest declined.

Market regulator SEBI is reviewing the 10% limit on stake held by directors or key management personnel in a company, proposed to be brought under the insider trading regulation.

The SEBI also proposed that company insiders should surrender profits made in any equity-based securities transactions of the company that is sold within six months of purchase.

Reliance Energy rose 4.09% to 2,372.10 rupees. It led the advancers in the Sensex index on news reports that Reliance Power is planning to raise $3 billion through the initial public offering of 26 crore shares at a price between 405 rupees to 450 rupees per share. Reliance Energy will lower its holding in Reliance Power to 50% from the current 100%.

Housing Development Finance Company gained 3.8% to 3,030 rupees. HDFC recently agreed to sell 7.15% stake in its life insurance joint venture - HDFC Standard Life Insurance Company a Mauritius based company, to Standard Life for 201 crore rupees.

State Bank of India advanced 1.2% to 2,413.20 rupees, ICICI Bank surged 3.4% to 1,273 rupees.


[R]5:00AM New York, 5:00PM - Hong Kong stocks declined on the first day of trading in 2008.[/R]

Stocks in Hong Kong declined as investors were wary pressures will mount on the U.S. dollar on speculation the U.S. Federal Reserve will cut interest rates on January 30.

In Hong Kong trading Hang Seng Index declined 1.24% or 346.13 to 27,466.52.

Turnover on the main board crossed HK$43.88 billion by mid-day, compared to HK$43.4 billion recorded during Monday''s half-day session.

The Hong Kong dollar is pegged at HK$7.80 to one U.S. dollar.

China Railway and China Communications Construction both rose 5% on expectations that infrastructure activities in China will increase in the coming years.

Property companies fell on expectations that a rate cut by the U.S. Federal Reserve might put pressures on the U.S. dollar. Hang Lung Properties declined 3.4%, Sun Hung Kai Properties tumbled 0.12 % and Cheung Kong plummeted 0.83 %.

Commodity stocks tumbled on falling metal prices. Datang Power, Chalco and Yanzhou Coal plunged as a result. However coal-mining company Hidili Industry International Development rose 1.84 % after the company said it will buy mining rights of three coal mines in Guizhou province for Rmb355 million.

MTR Corp climbed down from a record HK$30.75 before closing the morning up 5.75% at HK$30.35 as a result of its merger with Kowloon-Canton Railway Corp December.

China National Aviation Corporation, the parent company of Air China, announced in a statement last night that China Eastern and Singapore Airlines Limited should renew talks. CNAC also suggested that the current offer from Singapore Airlines at HK3.80 per share is below the fair value of the company.

CNAC also rejected the anti-dilution rights and non-competitive clause proposed by Singapore Air. Singapore Airlines in early September had agreed to buy a 24% stake worth HK$7.16 billion in China Eastern. China Eastern edged up 2.2% after the comments.

The Standard, an online edition, reported today that Emperor Capital Group managing director Daisy Yeung said today the company has entered into a strategic business tie-up with Jakarta-listed brokerage Hortus Danavest to tap into the Indonesian firm’s 20,000 clients.

Yeung said the company will provide online trading services, while Emperor’s clients will be able to trade Indonesian stocks through Hortus, which has a daily turnover of HK$10 million.

Separately, Emperor Capital Group recorded revenues increase of 33.7% from the previous year to HK$80.9 million for the six months ended September.

Henderson Land Development director John Yip Ying-chee said the company is expected to accelerate earnings beginning 2012 and its current land bank in the mainland China now stands at 120 million square feet.

In other Asian markets, ASX 200 in Australia increased 13.10 or 0.20% to close at 6,434.10. Financial markets in Tokyo were closed today.

In South Korea Kospi Index close at decreased 43.68 or 2.30% to close at 1,853.45, in Thailand SET index closed lower 13.83 or 2.19% to 616.90, and Indonesia JSE Index decreased 14.32 or 0.52% to 2,731.51. Sensex index in India increased 164.59 or 0.81% to close at 20,465.30.