FTSE 100	3952.81, +109.96	Dow	7775.86, +497.48
FTSE 250	6391.21, +118.80	Nasdaq	1555.77, +98.50
FTSE All Share	1995.95, +53.05	S&P 500	822.92, +54.38
Nikkei	8488.30, +272.77	Hang Seng	13910.34, +462.92
Oil (Crude)	$53.80	Gold	$953.80
Base Rate	0.5%	10 Yr Gilt	3.2%
£/$	1.466	£/€	1.079
1 month LIBOR	1.099	3 month LIBOR	1.732

 

Markets

London - The FTSE 100 is currently 12.87 points higher at 3,965.68. Financials unsurprisingly top the risers’ board with Royal Bank of Scotland up 8.4%, Lloyds Banking Group up 5.2% and Barclays up 5.1%. Lonmin climbs 4% after Temasek Holdings Pte said it will consider further mining investments. Rio Tinto tops the fallers’ board, down 3.4%, after Iron Ore CEO Sam Walsh said Tuesday that iron ore contract prices will need to fall this year based on current market conditions. RSA Insurance falls after JPMorgan cut its rating on the stock to Neutral from Overweight.

New York - All three major indices in the US rallied yesterday after the Treasury detailed its plan to buy up billions in bad bank assets. The government has committed $75-$100 billion of taxpayer money to launch the "Public-Private Investment Program", creating a market for the bad debt. Auctions will be run between the banks looking to unload the assets and investors looking to buy them. The success of the plan hinges on the private investor, but plan is skewed massively in their favour as they would only be responsible for around 7% of the total in any transaction. Investors were therefore encouraged when several large investors said they would participate in the scheme. The housing sector also provided a boost after the National Association of Realtors reported a 5.1% rise in existing home sales in February - the biggest increase since July 2003.

The Dow Jones rocketed 497.48 points higher to 7,775.86 while the S&P 500 jumped 54.38 points to 822.92. The Nasdaq surged 98.50 points to finish at 1,555.77.

Financial shares were among the strongest performing stocks helping the KBW Bank index to its best day since at least 1993. Bank of America soared 26% higher, JPMorgan leapt 25% and Citigroup gained 20%.

The Dow Jones index of home builders jumped almost 15% following the report on existing home sales. Risers of note included Lennar, up 20.4%, and Ryland Group up 17.6%

The energy sector was also strong due to rising oil prices and news of a large merger within the sector. Suncor Energy announced that it is to buy Petro-Canada for about $14.9 billion, creating Canada’s largest oil company. Exxon Mobil rose 6.7% while Chevron Corp gained 6.9%.

US light crude oil for May delivery added $1.73 to $53.80 a barrel. COMEX gold for May delivery slipped $3.60 to $953.80 an ounce. Treasury prices edged lower, raising the yield on the 10 year note to 2.64% from 2.63%.

Tokyo - The Nikkei jumped 272.77 points to close at 8,488.30 this morning on optimism the US Treasury plan will revive worldwide credit markets. Mizuho Financial Group, the Asian bank with the biggest subprime-related write downs, gained 5%.

Hong Kong - The Hang Seng surged 462.92 points higher to 13,910.34 this morning. Again, financials led the charge with HSBC rallying 9.8%. Hang Lung Properties rose 8.4% as mainland home sales increased.

Economics

UK CPI (Feb) 09.30 gmt

Over the past two months, CPI inflation has exceeded the consensus forecasts. In HSBC’s view this can be attributed to the upward pressure arising from the decline in sterling, which is limiting the extent to which firms can discount goods to attract jaded consumers. This is particularly evident in food prices, where the annual rate of inflation is still above 11 percent. In the Eurozone, falling commodity prices have caused food price inflation to fall to 2.5 percent, a trend that looks set to continue.
The RPI outlook for the next few months is extremely uncertain because of the interest rate pass through effect. HSBC Economics assumes that 35bp of the 50bp Policy rate cut in January is likely to have been passed on to mortgage interest rates. As a result, they forecast RPI inflation falling to -0.7 percent in February and see a trough of -3.4 percent being reached in September.

US FHFA house prices index (Jan) 14.00 gmt

The FHFA (formerly OFHEO) house price index rose 0.1 percent in December, but this was most likely just a temporary blip, and the downward trend in prices looks set to resume in January. The monthly purchase only index is expected to fall by 1.5 percent, with the year on year rate of change sliding to -9 percent from -8.7 percent in December.

Corporate

Australia and New Zealand Banking Group Ltd could get an instant boost to its footprint in Asia by buying Royal Bank of Scotland’s Asian operations, which represents an attractive and low cost option for growth, Macquarie Research analysts said Tuesday. Melbourne-based ANZ has made no secret of its ambitions to expand in Asia, where it aims to become a "super-regional" lender, and while an ANZ spokeswoman declined to comment on speculation it could bid for RBS Asian operations, she said it will assess strategic opportunities as they arise. RBS has hired Morgan Stanley to advise it on the potential sale of its retail and commercial banking businesses in Asia, which operate in eight countries around the region, including the key markets of India, China and Hong Kong. The businesses could fetch up to A$2.5 billion, Macquarie estimates.

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

 

Posted: March 24th, 2009 under Asset Management.
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