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E.L. & C. Baillieu Morning Wrap: Oil futures slide to their lowest level in six weeks

Friday, March 30, 2012 by E.L. & C. Baillieu Stockbroking - by Andrew Thain

European stocks slumped Thursday, following a raft of mixed economic data and a diagnosis from a European think tank that leading European economies will lag behind the U.S. The benchmark Stoxx 600 index slid 1.3% to 260.74.

European stocks slumped Thursday, following a raft of mixed economic data and a diagnosis from a European think tank that leading European economies will lag behind the U.S. The benchmark Stoxx 600 index slid 1.3% to 260.74.

HEADLINES

- Stocks ended mostly lower as economic data and overseas concerns weighed on investor sentiment, though blue chips eked out their first gain in three days with a late-day surge.

- European stocks slumped Thursday, registering their third consecutive loss, following a raft of mixed economic data and a diagnosis from a European think tank that leading European economies will lag behind the U.S. The benchmark Stoxx 600 index slid 1.3% to 260.74.

- Oil futures slid to their lowest level in six weeks Thursday as a combination of factors put a pin in the market, from weakening supply and-demand fundamentals to end-of-quarter profit-taking by asset managers.

- Gold may drop for a third day after jewelers in India, the world’s biggest buyer, extended a strike, curbing demand for the metal. Platinum was poised for the first three-month gain in five.


US MARKETS


Stocks ended mostly lower as economic data and overseas concerns weighed on investor sentiment, though blue chips eked out their first gain in three days with a late-day surge.

Buyers returned in the final hour of trading, cutting losses driven by worse-than-expected economic growth and job-market data. The Dow Jones Industrial Average rose 19.61 points, or 0.2%, to 13145.82.

The Standard & Poor's 500-stock index lost 2.26 points, or 0.2%, to 1403.28, after falling as low as 1391.56 in intraday trading. The Nasdaq Composite declined 9.6 points, or 0.3%, to 3095.36. Gains in utilities and health care offset declines in the financials and telecommunications sectors.

In other corporate news, Illumina gained 2.52, or 5.1%, to 52.40, after Switzerland's Roche Holding raised its bid to buy the gene-sequencing company. The new deal would value Illumina at more than $6.5 billion, up from $5.7 billion previously.

Red Hat surged 10.04, or 20%, to 61.43, after the open-source software company reported fiscal fourth-quarter earnings and revenue that exceeded estimates, boosted by strong growth in subscription revenue.


EUROPEAN MARKETS

European stocks slumped Thursday, registering their third consecutive loss, following a raft of mixed economic data and a diagnosis from a European think tank that leading European economies will lag behind the U.S. The benchmark Stoxx 600 index slid 1.3% to 260.74.

It also warned that the U.K.'s economy may contract in the first quarter, which would mean the country is in a technical recession, before expanding in the second quarter. The U.K.'s FTSE 100 ended 1.2% lower at 5742.03.

Banks were among major decliners. Banca Monte dei Paschi di Siena sank 11% after reporting a loss in 2011 due to a goodwill impairment charge. Banca Popolare di Milano lost 10% and UniCredit fell 5.8%. HSBC Holdings dropped 2.6% and Barclays fell 4.7%.


ASIAN MARKETS

Hong Kong led a drop for Asia stocks on Thursday, in the second day of notable losses for Chinese corporations, as investors grappled with a slew of heavyweight earnings and concerns about a global growth slowdown.

Hong Kong's Hang Seng Index fell 1.3% to 20609.39, and the Shanghai Composite index declined 1.4% to 2252.16, extending a steep fall made in the previous session.

Japan's Nikkei Stock Average lost 0.7% to 10114.79, while the South Korean Kospi retreated 0.9% to 2014.41. Japanese technology stocks lost ground after a weaker-than expected outlook from U.S. technology firm Applied Materials sent the U.S. Philadelphia Semiconductor Index down 1.3% on Wednesday. Advantest lost 2.9%, Tokyo Electronfell 3% and Kyocera shed 1.9%.


AUSTRALIAN MARKETS


Australian shares ended marginally lower, dragged down by losses in mining and energy shares as worries about growth in the United States and China depressed commodity prices.

However, the market outperformed the Asian region for the second straight session, supported by a weaker Australian dollar, which has boosted the outlook for company earnings.

At the close, the benchmark S&P/ASX200 index was down 5.6 points, or 0.1 per cent, at 4337.9, while the broader All Ordinaries index was down 9.5 points, or 0.2 per cent, at 4422. Three of the big-four banks advanced but Westpac fell 6 cents to $21.88.Bank of Queensland plunged 41 cents, or 5.36 per cent, to $7.24 as investors digested the effect of its capital raising.


OIL

Oil futures slid to their lowest level in six weeks Thursday as a combination of factors put a pin in the market, from weakening supply-and-demand fundamentals to end-of-quarter profit-taking by asset managers.

The market was down more than 3% at its lowest point; light, sweet crude for May delivery settled down $2.63, or 2.5%, at $102.78 a barrel on the New York Mercantile Exchange.

Brent crude on the ICE Futures Europe exchange ended down $1.77, or 1.4%, at $122.39 a barrel. The Nymex close was the lowest level since Feb. 16, 2012.


METALS

Gold may drop for a third day after jewelers in India, the world’s biggest buyer, extended a strike, curbing demand for the metal. Platinum was poised for the first three-month gain in five.

Spot gold fell as much as 0.3 percent to $1,659.52 an ounce and traded little changed at $1,661.52 by 11:26 a.m. in Singapore. The metal lost 1 percent yesterday, the biggest drop since March 14. Bullion for June delivery rose 0.2 percent to $1,663.40 an ounce on the Comex in New York.

 

Andrew Thain can be contacted by email; CLICK HERE.

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