Strength in Dollar Drags Gold, Oil; Stocks Up

Mukesh Buch
07 Dec, 2009
New York City

U.S. stocks and the dollar are edging higher as the rate increase speculation swirl the market. Citigroup trades lower after the Kuwait Investment Authority sells its entire stake and earns $1.1 billion profit. Gold and crude oil are on the decline in New York and London.

[R]9:15 AM New York – U.S. stocks and the dollar are edging higher as the rate increase speculation swirl the market. Citigroup trades lower after the Kuwait Investment Authority sells its entire stake and earns $1.1 billion profit. Gold and crude oil are on the decline in New York and London.[/R]

U.S. stocks and the dollar are expected to trade higher as the dollar strengthens in the morning trading. The yen also edged higher.

Commodities markets are roiled with the sudden rise in the dollar after the release of the jobs report. The unexpected improvement in the jobs market lifted the prospects of rate increase by the Fed.

The rate rise speculation lifted the dollar against the euro and the pound and the yen strengthened against the euro.

Middle East markets continued to fall in the wake of ongoing liquidity crunch in Dubai.

Dubai Financial Market General Index dropped 5.8% on Monday and has lost 17% in the last ten days since the liquidity crisis broke out. The benchmark index in Kuwait declined 2% and in Saudi Arabia fell 1%.

Micex Index in Russia dropped 1.8% to 1,318.76 after the price of gold, silver, copper and crude oil edged lower.

The Kuwait Investment Authority sold its stake in Citigroup for $4.1 billion and earned a profit of $1.1 billion. The stake sale news dragged the stock in the early trading. Separately, Bloomberg News is reporting that the government officials are worried that it may be too early to sell the 7.7 billion shares or 34% stake in the lender controlled by the government.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 145.01 or 1.45% to 10,167.60, and Hang Seng index in Hong Kong decreased 173.19 or 0.77% to 22,324.96, and CSI 300 index in China higher 25.34 or 0.70% to 3,668.83. ASX 200 index in Australia decreased 25.70 or 0.55% to 4,676.50 The FTSE Bursa KL Composite index in Malaysia was lower 4.84 or 0.38% to 1,265.36.

The Kospi Index in South Korea increased 7.89 or 0.49% to close at 1,632.65. JSE Index in Indonesia decreased 27.79 or 1.11% to 2,483.76. The Sensex index in India decreased 118.40 or 0.69% to 16,983.14. Markets in Thailand were closed today.

Europe Markets Review

In London FTSE 100 Index traded lower 26.39 or 0.50% to 5,295.97, in Paris CAC 40 Index decreased 12.81 or 0.33% to 3,833.81 and in Frankfurt DAX index traded lower 32.94 or 0.57% to 5,784.71. In Zurich trading SMI decreased 22.98 or 0.35% to 6,478.18.