Morning Spread

Morning Spread

Thursday 18th June 2015
IndexLevelChg (%)
UK Market6657.00-0.35
Dow Indust Avg17935.74+0.17
S&P 5002100.44+0.20
Nasdaq Composite5064.88+0.18
Nikkei 22519990.82-1.13
Hang Seng26694.66-0.22
IndexLevelChg (%)
Nymex 1m60.37+0.75
Gold Spot1195.47+0.83
GBP/USD1.5894-1.11
GBP/EUR1.3950-0.04
EUR/USD1.1394+1.15
USD/JPY122.75+1.20

European shares retreated this morning as hopes of a deal between Greece and its creditors at a summit later in the day receded. The ESTX 50 (-0.24%), UK markets (-0.38%), CAC 40 (-0.31%) and the Dax (-0.27%) all posted losses in early trading. Greece has snubbed European creditors’ pleas to submit a new proposal to avert insolvency, with both sides claiming the other has to make the first move. German Chancellor Angela Merkel is seeking to restore calm after exchanges have grown increasingly acrimonious. SAP dropped -1.6% after rival Oracle Corp forecast quarterly profit below analysts’ estimates. Bilfinger SE tumbled -9% after saying a review revealed substantial losses at its power business. The company said it will sell the unit within a year. Car manufacturers suffered this morning with Volkswagen AG and Renault SA slipping at least -1.3%.  

 

US stocks rose after the Federal Reserve said the US economy is likely strong enough to withstand an interest rate hike later this year. The Dow Jones Industrial Average (+0.17%), S&P 500 (+0.20%) and the Nasdaq Composite (+0.18%) all increased. Even if the majority of Fed officials continue to see higher rates by the end of 2015, they expect rates to rise slightly by the end of 2016 and 2017 than they did in their March forecasts. Adding to support for equities, investors have seen the proximity of rising rates as a trigger for more M&A activity, with mergers and acquisitions already at record levels. FedEx fell -3% after reporting a quarterly loss. Oracle fell nearly -7% in afterhours trading after missing revenue expectations.

 

Asian stocks dropped as Chinese stocks slumped after 11 companies launched IPO’s, putting pressure on liquidity and Japanese stocks suffered as the yen strengthened following the Federal Reserve’s comments. The Nikkei 225 (-1.13%), Hang Seng (-0.21%) and the S&P/ASX 200 (-1.26%) all dropped. Financial and technology companies led declines among Chinese shares with bank of Communications Ltd and Leshi Internet Information & Technology sliding more than -4%. China Shipping Development Co jumped +5.3% as a measure of commodity shipping costs posted the longest stretch of gains since March. Mitsui & Co slid -1.3% after Mitsubishi UFJ Morgan Stanley Securities Co cut its rating on the trading company. Nissan Motor Co, which gets almost half its sales from north America, lost -2.3%.