US markets experienced sharp gains on their first trading session in 2012 after survey showed better than expected manufacturing data. Dow Jones Industrial Average jumped 1.5% or 179.82 points at 12,397.38, S&P 500 Index climbed 1.6% or 19.46 points reaching 1,277.06 while Nasdaq Composite Index rose 1.7% or 43.57 points closing at 2,648.72.
The greenback fell to $1.3041 against Euro trading 0.3% from its 1-week record low on the report that showed US manufacturing expanded faster than predicted in December cutting demand for low-risk assets. The US Dollar weakened to $1.3041 in London morning trade after hitting $1.3050 yesterday. Currently EUR/USD is trading at $1.3042.
Chinese Prime Minister Wen Jiabao suggested the business environment may become relatively tough in the first quarter of 2012 and the monetary intervention is likely to be needed. Wen predicted a slowdown amid accelerating price inflation in the first three months of 2012. Barclays Capital's economists forecast Chinese central bank may lower further reserve requirements for commercial banks.
Aussie and Kiwi retreated from four day advance as European bailout fund prepares to auction three-year notes amid worries Euro Zones largest economies may face credit downgrading. Australian domestic currency lost 0.3% reaching $1.0349 in Sydney evening trade while New Zealand Dollar gave up 0.1% dropping to $0.7888. Currently AUD/USD is trading at $1.0361 and NZD/USD is trading at $0.7895.
European shares rallied Tuesday as in the morning they were lifted by lower than expected jobless rate in Germany but in the evening US reported better than predicted manufacturing activity. Stoxx Europe 600 index added 1.6% or 3.91 points and finished at 251.06, UK's FTSE 100 index rocketed 2.3% or 127.63 points after bank holiday and closed at 5,699.91. German DAX 30 index climbed 1.5% or 91.05
US production escalated in December, reaching the quickest pace in 6 months. The factor index estimated by Institute for Supply Management rose to 53.9 in December, compared to 52.7 in November. Analysts questioned by Bloomberg previously predicted the index would increase to 53.5. Commodity and stock markets rallied on the announcement.
According to survey, Chinese home prices alleviated for a fourth consecutive month in December. Domestic house prices declined 0.25% in December compared to previous month. Average prices in December dropped to 8,809 Yuan ($1,400) per square meter, while in November the average value was 8,832 Yuan per square meter. On monthly basis prices have fallen in 60 cities.
Japanese stocks opened higher on the first day after returning from holidays while Chinese shares declined amid worries about its tight liquidity. Japan's Nikkei Stock Average rose 1.2% and Australia's S&P/ASX 200 climbed 2.1%. China's Shanghai Composite Index lost 0.1%, Hong Kong's Hang Seng Index gave up 0.5% while South Korea's Kospi was 0.1% down.
Large number of non-commercial traders increased their short positions in the natural gas futures during last week on the New York Mercantile Exchange, reported Commodity Futures Trading Commission. Speculative traders hold net short position amounting 160,591 contracts. Natural gas futures lost 0.5% on the Nymex last week, according to CFTC data.
Copper futures advanced to three-week high as traders were inspired by expansion of manufacturing activity in China last month. Copper futures for delivery in March traded at USD3.486 a pound at the European trading session, on the Comex division of the New York Mercantile Exchange, adding 1.55%.
Bentley reported about 37% sales increase in 2011, citing the strengthening demand for luxury cars. The company sold 7,003 cars with price starting from ВЈ133,000. The US remained the largest market for Bentley and China took the second place with the sales volume exceeding the previous year high.
Commodities approached one-month high as economic indicators from China, the US and Germany returned confidence in the market. The Standard & Poor's GSCI Index added 1.7 % to 655.63. Manufacturing data from China signaled expansion, Germany saw a decrease in jobless rate while the US factory output is expected to post gains.
German DAX Index extended gains for the second straight session and traded 1.1% up at 6,141.84 after statistics showed the number unemployed in December fell more than predicted. Car makers led the gains in German benchmark index. Daimler AG surged 2.2%, BMW AG climbed 2.8% while Volkswagen AG added 2.2%.
Morgan Stanley experts said on Thursday they forecast S&P 500 Index to drop by 7% at 1,167 by the end of next year. Analysts base their expectations on weakening global outlook and floppy company results. Moreover, Morgan Stanley experts suggest that US Dollar is likely to strengthen and curb the corporate profits. Morgan Stanley also upgraded industrial sector and downgraded energy segment.
Avery Dennison Corp., the manufacturer of pressure sensitive substances and retail branding solutions, announced it will sell its "office and consumer products" business to 3M Corp. The deal is valued at $550 million. The earnings of the trade would help the company to cut debt, execute stock buy backs and provide pension contributions, said Avery Dennison in a Tuesday announcement.
UK benchmark FTSE 100 advanced sharply on Tuesday, catching up gains after bank holiday on Monday. FTSE 100 gained 0.9% or 52 points, reaching 622.55. Appreciation in the index was driven by mining companies as Rio Tinto PLC added 4.6%, BHP Billiton PLC climbed 3.5%. Kazakhmys PLC rose 3.2% while Xstrata PLC increased 3.3%. Mining shares surged after positive data on Chinese manufacturing. Engineering shares also recovered with
US futures rallied ahead of American first trading session in 2012 indicating that shares could also open higher and extend gains as manufacturing data from emerging economies are lifting investor optimism. Futures on Dow Jones Industrial Average gained 1.7% while those on S&P 500 surged 1.8%. Futures on Nasdaq Composite soared 2%. Stock futures signal probable direction of markets after opening.
US benchmark S&P 500 Index ended year almost flat or 0.003% down at 1,257.60. Nevertheless Wall Street analysts are optimistic towards US stock performance next year. On average money managers and strategists predict 7% improvement for the index. Their forecasts for 2012 vary between 1,225 and 1,583. The consensus among analysts is at 1,351.
Greece will be forced to exit the Euro Zone in case it fails to agree with the EU, private bondholders and the IMF on the second bailout worth 130 billion euros, said Pantelis Kapsis, government's official. The country may default in case the deal is not concluded till March when the country has to make bond payments. Experts say it is likely to agree
The EU countries have to solve the debt crisis using their own efforts, said Mitt Romney, Republican U.S. presidential candidate. The US has an interest in preventing the Euro Zone's collapse but the major responsibility for avoiding the recession should remain on the EU leaders, he added.
Petroleo Brasileiro SA announced it found new light oil and natural gas deposits in Espirito Santo state. Preliminary analysis determined the natural gas and oil of premium quality and the drilling will be continued to the depth of 6,100 meters to check deeper formations, said the company. Petrobras did not announce the estimated volume of the resources' deposits.
France insists that Iran's nuclear programme is aimed at developing weapons and demands 'stricter' sanctions for Iran, said Alain Juppe, Foreign Minister. He announced the EU countries should follow the US in banning oil exports and freezing the assets of the Iranian central bank. Iran denies all accusations saying the programme serves civil purposes.
Hungarian opposition engaged in mass protests against Hungary's new constitution approved on January 1. It is the first joint demonstration against Hungarian PM Viktor Orban since he was elected in 2010. Tens of thousands picketers gathered around Opera house in Budapest to protest against constitution which have been criticized by US and EU for hampering democracy. Lawmakers last week voted in favour of a law that
German jobless rate dropped more than predicted in December as lingering winter supported employments in construction. Surge in cars and machinery exports also contributed to decline in German unemployment. The number of unemployed people decreased by 22 000 in December, reaching 2.89 million, said national Labour agency. Economists earlier predicted a drop of 10 000.