World Markets in Retreat; Rates in China Rise

123jump.com Staff
07 Jan, 2010
New York City

World markets declined after China let its interest rate increase and new finance minister in Japan reiterated the stance of weaker currency. The Bank of England left its key lending rate at 0.5% and kept the bond purchase plan intact.

[R]9:40 AM New York – World markets declined after China let its interest rate increase and new finance minister in Japan reiterated the stance of weaker currency. The Bank of England left its key lending rate at 0.5% and kept the bond purchase plan intact.[/R]

New York stocks opened lower after world markets were on the retreat. China increased its lending rate for the first time in more than four months and finance minister of Japan reiterated his preference for lower yen. The Bank of England left its key lending rate unchanged amidst mixed economic data in the UK.

Freezing weather in most of the northern hemisphere continues to drive energy demand higher and disrupt passenger travel and commodities transportation.

The People’s Bank of China offered yields for its three-month bill at 1.3684% from 1.328%. A slight increase of less than 0.05% is viewed by most economists as more and larger rate increases in the future. Stocks in Shanghai and Hong Kong declined after the rate increase despite air and ocean transporters reporting near full bookings for shipments in December.

The Bank of England left its key lending rate at 0.5% and kept intact its government bond purchase program at 200 billion pounds.

Separately, mortgage lender Halifax said UK home prices increased 1% in December and increased 1.1% in the year compared to 2008 and the Society of Motor Manufacturers said new car sales surged 39% in December as the government provided incentives to exchange old cars.

Retail trade sales in November fell 1.2% compared to October in euro area EA16 and 0.8% in the EU27. Compared with November 2008 retail sales index decline 4% in the euro area and 2.1% in the EU27.

Earnings Review

Bed Bath & Beyond Inc, the housewares retailer said third quarter sales rose 11% to $1.98 billion from $1.78 billion a year ago. Net income in the quarter rose 72.5% to $151.3 million or 58 cents per diluted share compared to net income of $87.7 million or 34 cents per share a year ago.

Christopher & Banks Corporation, a women''s apparel retailer said third quarter sales fell 7.7% to $132 million from $143 million a year ago. Net income in the quarter rose 75% to $7.0 million or 19 cents per diluted share compared to net income of $4.0 million or 11 cents per share a year ago. Comparable same-store sales fell 8.4%.

Immucor, Inc, the blood-testing products maker said second quarter sales rose 13% to $82.6 million from $73.0 million a year ago. Net income in the quarter rose 14% to $19.7 million or 28 cents per diluted share compared to net income of $17.3 million or 24 cents per share a year ago.

J Sainsbury plc, the supermarket group said third quarter total sales rose 6.2% and comparable sales increased 3.8 and 4.2% excluding fuel and VAT.

Praktiker Bau und Heimwerkermaerkte Holding AG, the home-improvement retailer said fourth quarter sales fell 10.3% to €800 million from €892 million a year ago. Germany sales fell 6.9% to €549 million from €590 million a year ago. International sales fell 17% to €251 million from €302 million a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 49.79 or 0.46% to 10,681.66, and Hang Seng index in Hong Kong decreased 147.22 or 0.66% to 22,269.45, and CSI 300 index in China lower 70.27 or 1.98% to 3,471.46. ASX 200 index in Australia decreased 22.00 or 0.45% to 4,899.40. The FTSE Bursa KL Composite index in Malaysia was lower 1.75 or 0.14% to 1,291.42.

The Kospi Index in South Korea decreased 21.87 or 1.28% to close at 1,683.45. SET index in Thailand closed lower 1.10 or 0.15% to 734.63. JSE Index in Indonesia decreased 16.40 or 0.63% to 2,586.90. The Sensex index in India decreased 85.41 or 0.48% to 17,615.72.

Europe Markets Review

In London FTSE 100 Index traded lower 20.09 or 0.36% to 5,509.95, in Paris CAC 40 Index decreased 20.93 or 0.52% to 3,996.74 and in Frankfurt DAX index traded lower 53.29 or 0.88% to 5,981.04. In Zurich trading SMI decreased 53.60 or 0.82% to 6,505.81.