Germany Leads Decliners in Europe

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

European markets traded sideways after a surge in inflation, lower energy prices and higher metals prices in the region. Euro area inflation in March rose to 3.5%, a 15-year high. Banks fell in the region after Merrill Lynch lowered profit forecast for Swiss banks. Northern Rock hopes to repay loans to the Bank of England by 2011. Pernod Ricard agrees to buy Vin & Spirit from Swedish government for 5.3 billion euros. German stock index lost 18% in the first quarter.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Inflation across euro area rose to 3.5% in March. Bank stocks across the region declines.[/R]

Global Markets Update

European markets declined as inflation rose in March to 3.5%, a 15-year high. Rising food and energy prices contributed to consumer price index in the euro area. Most European markets fell more than 10% in the quarter as banking and credit market crisis continue to generate wider than expected losses at banks. Pernod Ricard agrees to buy Vin & Spirit AB for 5.3 billion euros from the Swedish government. Banks across the region fell after Merrill Lynch forecasted higher losses for Swiss banks. Vodafone, Northern Rock and ITV closes lower. Friends Provident rejects $7 billion offer from a U.S. private equity firm.

U.S. stocks edged higher on fall in energy prices. Pharmaceuticals and exchanges stocks declined. A committee of cardiologist warned that two drugs jointly marketed by Schering Plough and Merck with total sales of $5 billion were no better than their generic version Zocor. Schering and Merck plunged after the report.

U.S. farmers are expected to improve their net income in the current year as commodities prices are expected to trade near record levels. In the latest plating report from the USDA, more farmers are expected to plant soybeans to take advantage of higher prices and battle rising costs of fertilizers. Corn planting will be lower but still near record levels as demand for the largest grain production by value, as demand for ethanol drives the economics.

In Japan, Marubeni will close an investment fund that invested in structured investment vehicles. Separately Lehman is likely to sue Marubeni to recover $350 loss. Marubeni fell 6%. Stocks in Japan and Asia closed lower. In Tokyo trading Nikkei 225 dropped 2.3% or 294.93 at 12,525.54 and the broader Topix Index fell 2.5% or 30.85 at 1.212.96.

Hang Seng in Hong Kong trading fell 1.9% in Monday trading and declined 18% in the first quarter on rising inflation, falling dollar and worries related to global economic slowdown. Chinese Coking Industry Association forecasted higher coke price for the year as supply lags the rising demand. Financial stocks declined after analysts suggested that UBS may need to raise $16 billion in capital.

Australian bank St George raised its rate on variable home loans by 0.1% to 9.47%. The bank blamed a rise in interest to an increase in costs in the wholesale markets. Australian billionaire retailer and former Coles Group Ltd Chairman Solomon Lew today launch unsolicited $900 million takeover offer for Just Group Ltd. Sinosteel unveiled its formal offer for Midwest at $1.19 billion, lower than expected offer of $1.49 billion.

European Markets indexes

In London FTSE 100 Index closed higher 9.20 or 0.16% to 5,702.10, in Paris CAC 40 Index increased 11.15 or 0.24% to close at 4,707.07 and in Frankfurt DAX index lower 24.93 or 0.38% to close at 6,534.97. In Zurich trading SMI decreased 15.04 or 0.21% to close at 7,224.31.

North American Markets indexes

Dow Jones Industrial Average added 46.49 or 0.38% to a close of 12,262.89, S&P 500 closed up 7.48 or 0.57% to 1,322.70, and Nasdaq Composite Index increased 17.92 or 0.79% to a close at 2,261.18. In Toronto TSX Composite closed up 105.41 or 0.80% to 13,339.20.

Of the 30 stocks in Dow Jones Industrial Average, 27 closed higher, 3 closed lower, and none were unchanged.

Citigroup led the gainers in the Dow Jones index with a rise of 2.7% followed by increases in Home Depot of 2.4%, in General Motors of 2.3%, and in AT&T of 2.2%. Merck led the decliners in the index with a fall of 15% followed by losses in Alcoa of 0.3% and Hewlett Packard of 0.04%.

Of the stocks in S&P 500 index, 388 stocks increased, 109 declined, and 3 were unchanged. Of the stocks in the index, 8 stocks fell more than 3% and 35 gained more than 3%.

Micron Tech led the gainers in the S&P 500 index with a rise of 9.7% followed by increases in Fortune Brands of 8.9%, in Rowan Enterprises of 8.7%, and in SanDisk Corp of 5.9%. Schering Plough led the decliners in the index with a plunge of 27% followed by losses in Merck of 15%, in Pall Corp of 8%, in Akamai Technology of 4.8%, and in First Horizon of 4.4%.

South American Markets Indexes

In Latin Markets Mexico led gainers in the region with a rise of 3.02% followed by increases in Brazil of 0.67%, in Argentina of 0.67%, and in Chile of 0.42%. Venezuela led the decliners in the region with a loss of 0.6% followed by losses in Peru of 0.12%. Jamaica lost 1.3% in Caribbean trading.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 294.93 or 2.30% to 12,525.54, in Hong Kong Hang Seng index decreased 436.75 or 1.88% closed to 22,849.20. In Australia ASX 200 index higher 4.60 or 0.09% to close 5,355.70. In Malaysia KL Composite index decreased 10.89 or 0.87% closed to 1,247.52.

In South Korea Kospi Index increased 2.16 or 0.13% to close at 1,703.99, in Thailand SET index closed lower 8.14 or 0.99% to 817.03 and Indonesia JSE Index edged decreased 30.29 or 1.22% to 2,447.30. Sensex index in India decreased 726.85 or 4.44% to 15,644.44.


Commodities, Metals, and Currencies

Crude oil decreased $4.01 to close at $101.61 a barrel for a front month contract, natural gas increased 27 cent to $10.07 per mBtu, and gasoline futures decreased 8.60 cents to close at 262.75 cents per gallon.

Gold decreased $15.00 in New York trading to close at $921.50 per ounce, silver closed down $0.63 cents to $17.31 per ounce, and copper for front month delivery decreased 0.05 cents to 383.10 per pound.

Wheat futures decreased 60.00 cents in Chicago trading and closed at $9.29 per bushel. Sugar decreased 12.00 cent to 11.61 cents per pound. Soybean future closed down 70.00 cents to $11.97 a bushel.

Dollar edged higher and traded near a record low against euro to $1.5787 and edged higher against yen to 99.67.

Bond Yields increased for 10-year U.S. bonds and closed at 3.42% and on 30-year bonds decreased to close at 4.30%.