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News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


Markets News Friday: Stocks rally in Asia-Pacific and Europe; Commodities rise as US recession fears ease
By Finfacts Team
Jan 25, 2008 - 9:40:18 AM

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In New York Thursday, markets closed up on the day when the White House and Congress agreed a deal for a $150 billion economic stimulus package.

Besides, the Federal Reserve is expected to deliver another interest-rate cut next week following Tuesday's emergency cut of 0.75% to 3.50%.

The Dow Jones Industrial Average rose 108.44 points, or 0.9%, to 12378.61; the Standard & Poor's 500 added 1%, or 13.47 points, to 1352.07 and the tech-dominant Nasdaq Composite Index rose 1.9%, or 44.51 points, to 2360.92.

Asia-Pacific markets rallied strongly Friday.

In Tokyo, the Nikkei 225 Average rose 4.1%, at 13629.16, its biggest daily points gain since September. Exporters were among the gainers as the dollar rose against the yen. The dollar traded at 107.46 yen Friday, up from 106.79 yen late Thursday in New York.

Toyota Motor rise 6.3% and Honda Motor added 6.5%.

In Hong Kong, the Hang Seng Index surged 6.7% to 25122.37 on the prospects for further interest-rate easing in US. The Hong Kong dollar is pegged to the US dollar. In Australia, the benchmark S&P/ASX 200 jumped 279.9 points, or 5% but is down nearly 8% since the start of 2008, following a record 12-day losing streak.

Asia-Pacific - Key Benchmarks

In Europe, the Dow Jones 600 is up 1.70% in early trading Friday.

All 18 Western European markets have risen with rises in the big markets over 1% while in Dublin, the ISEQ is up over 2%.

National benchmarks -  Europe

Irish Share Prices

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies

The euro is trading at $1.4735 and at £0.7447.

For live currency updates, check the right-hand column of the Finfacts home page

Commodities

Crude oil for March delivery is trading on the New York Mercantile Exchange (Nymex) at $90.33 per barrel, up 92 cents overnight. In London, Brent is trading on the International Commodities Exchange at $90.13 up $1.03.

The oil price had been under pressure because of recession fears.

The US Energy Information Administration reported on Thursday that crude stocks rose by 2.3 million barrels last week.

Worries that the global economy is following the US into a slowdown have increased in recent weeks on signals from an early warning indicator -- an index that tracks global shipping rates for bulk commodities -- plunged to a six-month low.

The Baltic Dry Index is down over 30% since the start of the year and over 40% from an all-time high reached Nov. 13, according to the Baltic Exchange in London.

The Financial Times says that owners who were able to command rates of about $180,000 a day for the largest, Capesize, ships at the market’s peak are now receiving rates of between $85,000 and $110,000 a day.

The FT says that one of the most controversial figures in world shipping markets has denied playing a pivotal role in the past few weeks’ decline of dry bulk shipping rates, saying it resulted from fundamental market changes.

Nobu Su, whose privately held Taiwan Maritime Transport is the largest participant in shipping futures markets, responded to the suggestion through a London-based spokesman.

Stocks (Million Barrels)
Stock Price Graphs.
Stocks Change From Last
01/18/08 Week Year
Crude Oil 289.4 values are up2.3 values are down-32.8
Gasoline 220.3 values are up5.0 values are down-0.5
Distillate 128.5 values are down-1.3 values are down-14.1
Propane 45.425 values are down-3.243 values are down-8.132

Participants in dry bulk markets have attributed the decline in rates from last year’s record highs partly to TMT’s heavy betting on a fall in futures markets. There have also been claims from competitors that Mr Su, chief executive, has helped to push rates towards his position by chartering out some of his 130 ships at below market rates.

Gold spot price

The spot price of gold is at $918.40 per ounce, up $9.40 overnight in New York.

Mark O'Byrne, Director of Gold Investments Ireland, commented on Thursday:

The notion that because stock markets have a short one day rally that the worst may be over is ludicrous, irresponsible spin. Unfortunately we remain in the early stages of this global financial and economic crisis. Massive financial and systemic risk (including those posed by downgrades of the bond insurers) has not gone away despite some very optimistic headlines and vague reporting. The FT correctly reported that there is “widespread concern that more rating agency downgrades of the specialist insurers - known as monolines - could force a fresh round of writedowns by banks, which could in turn damage already battered investor confidence.”

The credit crisis is far from over and this was evident in the news that France's second-largest bank by market value after BNP Paribas, Société Générale bank, said they had a fraud that will result in a €4.9 billion loss and that it will write down an additional €2.05 billion in assets related to subprime exposure. The bank also announced that it plans to raise €5.5 billion in capital in "the following weeks."

More informed observers and those who have predicted such problems for some time (unlike many more recent converts who previously dismissed such talk as “fear peddled by doom and gloom merchants”) are warning that the problems remain and look likely to get worse before they get better.

George Soros, the hedge fund manager, has said that the global economy faces the worst crisis since World War II and said that the Fed was "well behind the curve". Joseph Stiglitz of Columbia University said the cut would be as effective as "pushing on a piece of string". Stephen Roach of Morgan Stanley said in his FT.com blog from the World Economic Forum annual meeting in Davos that the Fed's policy was "a dangerous and reckless and irresponsible way to run the world economy".


© Copyright 2009 by Finfacts.com

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