logo-loader

Market briefing: US markets closed in the red yesterday, led by weakness in energy shares

Published: 08:37 26 Jul 2016 BST

no_picture_pai

UK Market Snapshot
UK markets ended mixed yesterday. The FTSE 100 index reversed its gains from previous session as falling crude oil prices weighed on energy sector stocks. Royal Dutch Shell, BP and Tullow Oil lost 2.5%, 2.6% and 5.4%, respectively. Randgold Resources dipped 3.4%, after it cut its full year production targets due to issues at its Tongon gold mine. Other miners, BHP Billiton, Antofagasta and Fresnillo dropped 0.4%, 0.8% and 1.6% respectively. On the gaining side, William Hill advanced 4.9%, amid news that 888 Holdings, up 3.4%, and Rank Group, down 0.5%, are considering making a joint takeover offer for the company. Aberdeen Asset Management added 0.6%, after it reported an increase in its assets under management in the third quarter ended 30 June 2016. The FTSE 100 declined 0.3%, to close at 6,710.1, while the FTSE 250 rose 0.6%, to settle at 17,091.0.
US Market Snapshot
US markets closed in the red yesterday, led by weakness in energy shares. Exxon Mobil, Devon Energy and Chesapeake Energy fell 1.9%, 4.4% and 4.6%, respectively. Roper Technologies tumbled 5.8%, following disappointing results in the second quarter. Kimberly-Clark declined 1.5%, after the company cut its organic sales outlook for the full year but reported better than expected results for the second quarter. Verizon Communications slid 0.4%, after it confirmed the acquisition of the web business of Yahoo!, down 2.7%, in a deal worth $4.8 billion. On the upside, Sprint Corp rallied 27.7%, after it posted upbeat revenue in the first quarter. Micron Technology surged 6.0%, after it filed a new shareholder rights plan. The S&P 500 slipped 0.3%, to settle at 2,168.5. The DJIA shed 0.4%, to settle at 18,493.1, while the NASDAQ slid marginally, to close at 5,097.6.
Europe Market Snapshot
Other European markets finished higher yesterday, as expectations about upbeat corporate earnings offset a decline in crude oil prices. Ryanair Holdings surged 6.9%, after it reiterated its earnings outlook for the year following a rise in its net profit for the first quarter. Ericsson gained 1.5%, after the company announced that that its Chief Executive Officer, Hans Vestberg, is stepping down with immediate effect. On the contrary, Banca Monte dei Paschi di Siena plummeted 8.4%, on the back of reports that stress-test results due on 29 July would reveal that its capital position is at risk. Energy producers, Eni and Total eased 1.4% and 1.9%, respectively. The FTSEurofirst 300 index gained 0.1%, to close at 1,345.0. Among other European markets, the German DAX Xetra 30 rose 0.5%, to close at 10,198.2, while the French CAC-40 advanced 0.2%, to settle at 4,388.0.
Asia Market Snapshot
Markets in Asia are trading mostly higher this morning. In Japan, the Nikkei 225 index has fallen after media reports of less-than-expected ¥6.0 trillion stimulus injection by the Government over coming years disappointed investors. Oil majors, Japan Petroleum Exploration and Inpex have shed 3.1% and 3.4%, respectively. Exporters, Toyota Motor, Nissan Motor and Canon have dropped 1.6%, 2.4% and 2.5%, respectively, as the Japanese Yen strengthened. However, SoftBank Group has gained 3.9%, tracking yesterday’s rally in Sprint on Wall Street. In Hong Kong, Galaxy Entertainment Group and Sands China have soared 6.9% and 7.1%, respectively. In South Korea, Hyundai Motor and Samsung Electronics have climbed 1.1% and 1.7%, respectively. The Nikkei 225 index is trading 1.5% lower at 16,362.9. The Hang Seng index is trading 0.8% up at 22,161.2, while the Kospi index is trading 0.5% higher at 2,021.5.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.42% or $0.19 higher at $44.91 per barrel, ahead of the American Petroleum Institute’s weekly oil inventory data, scheduled to release later today. Yesterday, the contract declined 2.12% or $0.97, to settle at $44.72 per barrel, amid persistent concerns regarding global crude glut. Data showed that US crude oil inventory climbed 1.1 million barrels at the Cushing, Oklahoma hub in the week to 22 July 2016.
Gold
At 0330GMT today, Gold futures contract is trading 0.30% or $3.90 higher at $1323.40 per ounce. Yesterday, the contract declined 0.29% or $3.90, to settle at $1319.50 per ounce, with investors remaining cautious ahead of the US Federal Reserve’s two-day policy meeting, which starts today.
Currency
At 0330GMT today, the EUR is trading 0.08% lower against the USD at $1.0986. Investors will look forward to the US consumer confidence and the US services PMI data, both for the month of July, due later today. Yesterday, the EUR strengthened 0.16% versus the USD, to close at $1.0995, following better than expected German Ifo survey data for July.
At 0330GMT today, the GBP is trading 0.21% lower against the USD at $1.3113. Yesterday, the GBP strengthened 0.24% versus the USD, to close at $1.3140, reversing its losses from previous session.
Fixed Income
In the US, term treasury prices fell and pushed yields mostly higher, amid a disappointing auction of 2-year treasury bills. Yesterday, yield on 10-year notes rose 1 basis point to 1.58%, while yield on 2-year notes gained 1 basis point to 0.72%. Meanwhile, 30-year bond yield remained unchanged at 2.29%.

Key Economic News
UK CBI Business Optimism rose in 3Q 2016

Pessimism among London businesses for the next six months has increased, with a net 47.00% of firms showing pessimism about their business prospects in 3Q 2016, as compared to a net 5.00% of firms that showed pessimism in the previous quarter. Market expectation was for a net 15.00% of firms to show pessimism about their future business prospects.
UK CBI trends selling prices registered a rise in July
CBI trends selling prices in the UK climbed to 5.00 in July. In the prior month, CBI trends selling prices had recorded a level of 1.00.
UK balance of firms reporting total order book above normal dropped in July
Compared to a reading of -2.00 in the prior month the balance of firms reporting total order book above normal fell to a level of -4.00 in July, in the UK. Markets were anticipating the balance of firms reporting total order book above normal to ease to -6.00.
German Ifo business expectations index eased in July
The Ifo business expectations index dropped to 102.20 in Germany, in July, compared to market expectations of a drop to a level of 101.60. The Ifo business expectations index had registered a reading of 103.10 in the previous month.
German Ifo current assessment index advanced surprisingly in July
Compared to a revised level of 114.60 in the prior month the Ifo current assessment index advanced unexpectedly to a level of 114.70 in Germany, in July. Market anticipation was for the Ifo current assessment index to drop to a level of 114.00.
German Ifo business climate index dropped in July
In July, the Ifo business climate index in Germany dropped to 108.30, higher than market expectations of a drop to a level of 107.50. The Ifo business climate index had registered a reading of 108.70 in the prior month.
US Dallas Fed manufacturing business index climbed in July
In July, the Dallas Fed manufacturing business index advanced to -1.30 in the US, compared to a reading of -18.30 in the previous month. Market expectation was for the Dallas Fed manufacturing business index to climb to -10.00.
Japanese coincident index dropped in May
The final coincident index recorded a drop to 109.90 in May, in Japan. In the prior month, the coincident index had registered a reading of 112.00. The preliminary figures had recorded a drop to 110.50.
Japanese leading economic index fell in May
In May, the final leading economic index registered a drop to 99.70 in Japan. The leading economic index had registered a reading of 100.00 in the prior month. The preliminary figures had recorded a steady reading.
Japanese corporate service price index rose more than expected in June
On a YoY basis, in Japan, the corporate service price index rose 0.20% in June, compared to a similar rise in the prior month. Markets were anticipating the corporate service price index to advance 0.10%.

 

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

1 hour, 58 minutes ago