Asian stocks are traded lower eying the spreading debt crisis in the euro-zone. Energy and banking sectors are the top decliners. Australia's S&ASX index decreased by 1.7%, South Korea's Kospi lost 1.4%, Hong Kong's Hang Seng Index declined by 1.3% and China's Shanghai Composite fell by 0.4%. However, Japan's Nikkei Stock Average increased by 0.2%, but stayed near two-year low.
Deutsche Lufthansa AG, air carrier, announced it is going to stop its investments across the company because of economic recession. Lufthansa is greatly concerned about severe impact of the crisis on the aviation industry. The measure is going to last for six months, although the company did not report about the amount to be saved. The measure will come into force starting with Monday.
The Indian cabinet is going to discuss a proposal regarding opening the retail sector for foreign companies as Wal-Mart and Tesco. The country may allow 51% FDI in the sector that generates $450bn a year in sales. At the moment large foreign companies can be only wholesalers and are not allowed to sell directly to customers. The issue is controversial and it will be difficult
Microsoft Corp. has signed a contract with Yahoo! Inc. in order to gain access to Yahoo's financial information. Microsoft Corp. is going to use this information to estimate the value of bid. Yahoo's advisors required the bids to be submitted during next week. Bidders are expected to propose buying a minority stake as full takeover hasn't been arranged.
On Thursday German DAX 30 index managed to interrupt 8-day losses and edged up 1.5% to 5,543.91 as Ifo reported higher-than-expected business confidence index. German financial institutions recovered immediately: stocks of Commerzbank AG added 7.6%, Allianz SE gained 2.5% while Deutsche Bank AG advanced 2.9%. Downgrade of Portugal has offset part of gains but did not break the upward trend.
Nasdaq Composite index followed other leading US market indexes and declined 2.4% or 61.20 points ending at 2,460.08 amid fears that poor German bond auction could signal deepening crisis. Gilead Sciences was one of few gainers that added 2.27% on announcement of acquisition of biotechnology company Pharmasset. Major negative contribution from the index came from Sirius Xm Radio Inc. and Micron Technology that each gave
Standard & Poor's 500 Index lost 2.2% or 26.25 and closed at 1,161.79. All 10 industries in index experienced decline, led by banks, material makers and energy companies. Index declined for sixth consecutive day in a row which is the longest decline since August. Bank of America declined 4.28%, Janus Capital Group Inc. gave up 4.41%. Cabot Oil & Gas Corp. and Tesoro Petroleum Corp.
Although most Asian market indexes recovered on Thursday, Nikkei 225 closed lower at 8,165.18 giving up 149.56 points or 1.8%. Analysts explain Nikkei's loss as investors attempt to catch up to yesterday's developments in Europe. German poor auction amid poor manufacturing report from China had a negative impact on the index. Nikkei 225 was mainly hit by blue chip companies. Fujitsu Ltd. lost 2.6%,
On Thursday trade Hang Seng index experienced first increase this week as People's Bank of China agreed to ease reserve obligations for more lenders encouraging investors to believe in additional relaxation. Hang Seng closed at 0.4% or 70.67 points higher climbing to 17,935.10. Main positive contribution to the index was provided by property developers. China Overseas Land and Investment Ltd. jumped 5.6%, China Resources Land
Fitch Ratings decreased Portugal's government credit rating to BB- from BBB- putting Portugal in junk status. The agency took into account bleak economic outlook, high debt level and mass protests against austerity measures that can decrease the level of debt. However, experts admit the government commitment to the austerity plan is strong. The Portugal 20 index increased by 0.2%.
Raiffeisen Bank International AG third biggest lender in Eastern Europe, reduced its medium term profit outlook after it experienced sharp losses in Hungary. Vienna-based financial intermediary predicted the ROE before taxes to reach 15% in contrast to previous forecast between 15% and 20%. Raiffeisen�s net income dropped by 58% within a June-September period.
Wheat futures slipped to the lowest level since June being pushed by high competition for US exports and bleak economic perspectives of the euro-zone. On the Chicago Mercantile Exchange, wheat futures for December delivery were traded at USD 5.7950 a bushel during early European trade, declining 2.31%. Wheat prices were also impacted by unrest in Egypt as the country agreed to buy 240,000 tons at
Failure of the Germany's auction has led to increasing worries about the euro-zone debt crisis. The current German 10-year bonds cost 2.23% exceeding the French ones priced at 2.21%. Experts claim the UK has stronger appeal to investors as it is considered to be a safer investment option.
JPMorgan Chase & Co has confirmed it will buy shares of bankrupted MF Global at London Metal Exchange. JPMorgan is expected to pay for MF's stake about 25 million pounds ($38.8 m). Last month MF Global declared bankruptcy after making bets that failed on European debt. JPMorgan agreed to buy all of MF Global shares, said Richard Heis, special administrator of MF Global.
Zambia's nickel mine, Munali Nickel Mine, announced it will resume its operations in January after implementing restructuring program. The company ceased its operations because of the cash flow difficulties in the beginning of November. The company plans to attract investors to finance the company and make its capital structure more stable, said the official.
Standard & Poor's has decreased the credit rating of Egypt from BB- to B+ pushing Egypt's debt close to junk status. The agency explains this downgrade as a result of political and economic situation in the country that continues to deteriorate. There were four days of demonstrations in Egypt before parliamentary elections due 28 November.
Copper futures surged after the German report indicated an unexpected increase in German business confidence. On the Comex division of the New York Mercantile Exchange, copper futures for December delivery were traded at USD 3.298 a pound at the early European trading, gaining 1.05%. Copper earlier decreased by 1.95% and was traded at USD 3.205 a pound, being a four-week low.
United Continental Holdings Inc. is planning to renew its flotilla of single-aisle airplanes and is currently participating in talks with Airbus SAS and Boeing Co regarding an order of about 200 jets. United Continental Holdings, world's biggest airline is considering Airbus A320 and Boeings 737 as well as new models with more effective engines. United Continental Holdings Inc. was created in 2010 after a merger
Britain's benchmark stock index increased by 0.6% on the increased business confidence in Germany. The strongest gainers are British banks and miners; the Royal Bank of Scotland Group PLC increased by 3.9%, Lloyds Banking Group PLC gained 3.6% and Barclays PLC rose by 3.5%. The top gainers among miners are Vendanta Resources PLC and Xstrata PLC that gained 3.9% and 3.7% respectively.
Today Portugal faces general strike, first since November 2010, as unions engage into demonstrations against austerity measures approved by Portuguese parliament to ensure the international bailout. Unions have disrupted shipping, services and travel. Serious distractions are expected in airports and rail stations. Strike takes place exactly one year after demonstrations against the first austerity implementation.
Consumer confidence in Italy significantly increased in November indicating the end of political turmoil by arrival of new government, according to the official data. The consumer confidence index increased to 96.5 in November from 93.3 in October. The increase exceeded the forecast of 0.9 point decrease. Monthly survey also showed more optimism in the market, Istat stated.
Standard & Poor's increased Iceland's credit rating outlook from negative to stable as country's economy returns to progress after recovering from financial crisis in 2008. According to Standard & Poor's yesterday's statement, Iceland has received �BBB-/A-3' credit rating. Iceland has put much effort to stimulate recovery, admitted S&P in its statement.
German Chancellor Angela Merkel refused the idea of issuing Eurobonds offered by European Commission. Merkel emphasized that the creation of Eurobonds will not pull the region out of debt crisis. German Chancellor also criticized European Commission's inappropriate switching to Eurobonds proposal, as it gives other countries misleading signal that more borrowing could resolve the crisis.
Crude oil futures have started to rise after a two–day decline. On the New York Mercantile Exchange crude futures for January delivery were traded at USD 96.75 a barrel at early European trade, being 0.6% higher. Experts claim that lower Dollar and strong oil demand in the US stimulate growth of the oil prices.