European Markets Surge

123jump.com Staff
25 Mar, 2008
New York City

European markets surged after a rally in the financials lifted averages across the region. The ECB provided additional liquidity in the market but at a higher interest rate than a week ago. Markets in the region surged more than 3%. Adidas lifted Reebok sales growth estimate. France lowered its annual growth rate to 1.7% from 2%. Ford is likely to announce sale of its luxury car group to Tata based in India, tomorrow. Impreglio of Italy won a water project for Las Vegas City for $450 million.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European markets surged on a rise in banks, brokerages and mining stocks.[/R]

Global Markets Update

European markets surged more than 3%. Market indexes in London, Paris, and Frankfurt jumped on higher metal prices and a rebound in financial stocks. The ECB received bids for 20 billion of euros for its auction of 15 billion euros from 34 banks. Separately the bank provided 216 billion euros in lending at a rate of 4.23%, up from 4.16% a week ago.

France lowered its estimate of economic growth for the year to 1.7% from 2% on the rising economic uncertainties related to the U.S. economy. Euro surged to a record high against dollar after it faced another round of worries related to the U.S. economy. Iceland currency Krona surged 6% against dollar and 5% against euro after the central bank rose interest rate by 1.25% to 15%.

Accor is likely to form an alliance with construction company Leighton Holdings in Australia to build as many as 100 hotels in India and China. The alliance is expected to be worth $700 million. The news was first reported in Australian Financial Review. India has only 105,000 hotel rooms, less than total rooms in Las Vegas.

Adidas raised its sales guidance for Reebok brand from low to mid-single digit growth to mid to high single digit rate for the current year. Adidas left sales guidance for the group unchanged. Vulcabras SA of Brazil and Adidas entered into a joint venture agreement to sell Reebok footwear in Brazil and Paraguay.

U.S. consumer confidence index in February fell to a five-year low as rising fuel and energy prices and falling home values affected consumers. The outlook for the next six months according to index appears to be gloomy. Home prices in February declined 10.7% from January. The two measures left U.S. market averages traded lower in the morning trading hours.

Stock in Mumbai trading surged after a rally in Asia stocks lifted market averages across the region. Hong Kong and India led the region with a sharp rebound of more than 6%. Realty, banks and technology stocks led the gainers in Mumbai trading. Sensex gained 6.1% or 928.09. At close, the BSE 30 share closed at 16,217.49. Nifty gained 5.1% or 267.65 to close at 4,877.50 levels.

Tokyo stocks rallied on the back of higher closing in the U.S. in Monday trading. Banks and brokerage stocks led the advancing issues. In Tokyo trading, Nikkei 225 rose 2.12% or 265.13 at 12,745.22, and the broader Topix Index increased 1.5% or 18.83 to 1,242.98. Nippon Glass forecasted 20% rise in sales and 50% surge in operating profit on higher demand in the next fiscal year.

Stocks in Hong Kong surged after a revised bid for Bear Stearns and better than expected home sales in February lifted U.S. stocks. Hong Kong and Indian stock market averages led the rise in Asian markets. Hang Seng Index rose 6.43% or 1,356.30 to 22,464.52. After the close, ICBC reported a sharp rise in profit. Airline stocks gained on the speculation that newly elected government in Taiwan will open direct flight routes between the country and China.

Australian stocks surged as markets in Asia rallied. ASX 200 gained 3.7% or 190.0 to 5,318.40. The sharp rise in stocks in the U.S. on better than expected home sales in February and revised bid for JP Morgan lifted the sentiment in the region. NAB increased its home loan rate by 0.09% to 9.36%. Santos chief executive resigned. Leighton surged 9% after it won a $795 million contract to build pipeline for ONGC near Mumbai, India.

European Markets indexes

In London FTSE 100 Index closed higher 193.90 or 3.53% to 5,689.10, in Paris CAC 40 Index increased 158.28 or 3.49% to close at 4,692.00 and in Frankfurt DAX index higher 204.72 or 3.24% to close at 6,524.71. In Zurich trading SMI increased 224.56 or 3.20% to close at 7,234.42.

North American Markets indexes

Dow Jones Industrial Average declined 16.04 or 0.13% to a close of 12,532.60, S&P 500 closed up 3.11 or 0.23% to 1,352.99, and Nasdaq Composite Index increased 14.30 or 0.61% to a close at 2,341.05. In Toronto TSX Composite closed up 301.90 or 2.32% to 13,321.62.

Of the 30 stocks in Dow Jones Industrial Average, 15 closed higher, 15 closed lower, and none were unchanged.

Alcoa led the gainers in the index with a rise of 2.3% followed by gains in DuPont of 1.3%, in McDonalds of 1.09%, in Citigroup of 1.07%, and in Merck of 0.86%. Bank of America led the decliners in the index with a loss of 3.5% followed by losses in Home Depot of 1.9%, in JP Morgan of 1.14%, in Wal-Mart of 0.99%.

Of the stocks in S&P 500 index, 285 stocks increased, 211 declined, and 4 were unchanged. Of the stocks in the index, 19 stocks fell more than 3% and 28 gained more than 3%.

MGIC Investment led the decliners in the index with a loss of 7.6% followed by losses in Sunoco of 4.97%, in Clear Channel of 4.7%, in Valero of 4.65%, and in Public Storage of 4.63%. Monsanto led the gainers in the index with a rise of 9.07% followed by gains in General Growth Properties of 7.87%, in BJ Services 7.16%, and in US Steel of 5.05%. Weatherford Industries, Consol Energy, and Nabors added more than 4%.

South American Markets Indexes

In Latin Markets Argentina led the gainers in the region with a rise of 2.9% followed by increases in Brazil of 2.18%, in Mexico of 1.64%, and in Chile of 0.15%. Venezuela declined 0.4% and Peru fell 0.04%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 265.13 or 2.12% to 12,745.22, in Hong Kong Hang Seng index increased 1356.30 or 6.43% closed to 22,464.52. Australia ASX 200 index increased 190.90 or 3.72% to close 5,318.40. In Malaysia KL Composite index increased 28.93 or 2.41% closed to 1,229.95.

In South Korea Kospi Index increased 19.63 or 1.19% to close at 1,674.93, in Thailand SET index closed higher 13.03 or 1.61% to 820.31 and Indonesia JSE Index edged increased 80.32 or 3.43% to 2,419.62. Sensex index in India increased 928.09 or 6.07% to 16,217.49.

Commodities, Metals, and Currencies

Crude oil increased $0.64 to close at $101.50 a barrel for a front month contract, natural gas increased 10 cent to $9.43 per mBtu, and gasoline futures increased 3.93 cents to close at 268.05 cents per gallon.

Gold increased $16.30 in New York trading to close at $935.00 per ounce, silver closed up $0.69 cents to $17.80 per ounce, and copper for front month delivery increased 5.00 cents to 367.85 per pound.

Wheat futures increased 47.50 cents in Chicago trading and closed at $10.67 per bushel. Sugar increased 36.00 cent to 12.28 cents per pound. Soybean future closed up 50.00 cents to $13.07 a bushel.

Dollar edged lower and traded near a record low against euro to $1.5609 and edged higher against yen to 100.15.

Bond Yields decreased for 10-year U.S. bonds and closed at 3.51% and on 30-year bonds declined to close at 4.31%.