Weekly Trading Update
27.01.12 Friday Evening
European shares rose on Thursday, halting two days of losses as bond auctions took a back seat with the US Federal Reserve announcement that interest rates would remain low for a considerably longer than expected period the key factor.
The US also declared that it is ready to offer additional stimulus to boost economic growth. Off the back of this news the price of gold shot up as the dollar weakened.
However, stock gains were capped as the Greek talks failed to materialise a final solution to the debt swap situation with Eurozone finance ministers rejecting the offer from the private bondholders. The ECB has recognised that it will take a hit on Greek bond losses.
There was, as has been the vogue in January, a bond auction with Germany selling €2.54bln of 1 year zero coupon bonds on Monday.
ECB statements were aplenty with Noyer commenting that French growth should pick up after stagnation in Q4 and Wiseman echoing a similar outlook for Germany with a more dynamic economic climate returning in 2012.
The European Union went through with its planned embargo on Iranian Oil Imports with the ban coming into effect from the 1st July. This sanction will also ban European companies including Total and Royal Dutch Shell from selling crude to non-EU destinations.
Outside of Europe the Eastern world saw a quiet trading week with Chinese markets closed all week in celebration of the Lunar New Year in the Year of the Dragon.
Japan announced their first trade deficit since 1980 with the yen weakening as a result. However, the continued strengthening of the Yen against the Dollar has prompted Bank of Japan intervention talks. An IMF economist has commented that global recovery is in danger of stalling, with the IMF revising their forecast for global growth to 3.3% from 4% for 2012.
In America unemployment remained below 400K and durable goods order changes came in better than expected with a 2.1% increase. However, the main news concerned Apple who reported record quarterly revenues of $46.3bln powered by the sale of 37M iPhone devices. Its Share price jumped nearly 10% in after-market trading before slipping back to a 7.5% gain.
At one point Apple became the world’s most valuable company with market capitalisation of $417bln before Exxon resumed that position by end of trading on Wednesday. Another big mover was healthcare company Illumina which rocketed to above $50 a share off the back a possible $5.7bln hostile takeover from Roche.
The mining industry was the focus of UK equity news with an upward movement across the sector. Rockhopper reported interest from Anadarko and Gulf Keystone reported a positive update on how their Kurdistan operation was progressing.
Negative news came from Petroplus, Europe’s largest independent refiner, which is filing for insolvency after debt talks ran out of fuel. Analysts say Petroplus’s administrators might struggle to find buyers for some of its plants in a market that has long suffered from overcapacity, poor profit margins and weak demand for petroleum products amid Europe’s economic downturn.
Heritage Oil announced they had been awarded further acreage in Tanzania, International Ferro Metals output was up 71% on the previous quarter with Anglo American and Lonmin also announcing production and output increases.
Open (Monday)
5743.3
Close (Thursday)
5774
Change
0.53
High
5807
Low
5691.5
Open (Monday)
1673.3
Close (Thursday)
1724.7
Change
3.07
High
1733.5
Low
1652.1
Open (Monday)
1.5548
Close (Thursday)
1.5684
Change
0.87
High
1.5733
Low
1.5517
Open (Monday)
12685
Close (Thursday)
12733
Change
0.38
High
12838
Low
12580
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