FTSE 100	5245.73, +51.6	Dow	10309.92, -154.48
FTSE 250	9031.54, +151.02	Nasdaq	2138.44, -37.61
FTSE All Share	2676.81, +28.25	S&P 500	1091.49, -19.14
Nikkei	9345.55, +264.03	Hang Seng	21866.22, +731.72
Oil (Crude)	$76.05	Gold	$1175
Base Rate	0.5%	10 Yr Gilt	3.5%
£/$	1.6539	£/€	1.0978
1 month LIBOR	0.511	3 month LIBOR	0.614

 

Markets

London - UK stocks rebounded on Friday, recouping part of the previous session’s sharp losses as banks rebounded on subsiding Dubai debt fears while firmer commodity prices aided miners and oils. The FTSE100 closed 51.60 points higher at 5245.73m having fell 3.2 percent on Thursday.

The banking sector rebounded after steep falls both earlier on Friday and in the previous session, as investors became less concerned about exposure to Dubai, which on Wednesday sought a debt standstill for state owned Dubai World. Banks outside the Gulf played down their exposure to Dubai debt after fears of default shook global markets, and European leaders said the world economy was now strong enough to cope with the setback. RBS jumped 5.2 percent following a sharp slide on Thursday, and Barclays, HSBC and Standard Chartered adding 0.1 to 2.3 percent. Lloyds Banking Group dropped 0.9 percent as the banks shares traded ex-rights following overwhelming investor support for the bank’s £13.5bn cash call.
Life insurers also recovered from Thursday’s falls, with Prudential, Legal and General, Aviva and Resolution up 2.2 to 3.1 percent.

Miners were the top performing sector, helped by bargain hunters after sharp falls a day earlier, with spot gold rallying from a one week low, copper rising 0.2 percent and aluminium gaining 0.4 percent. Xstrata and Lonmin rose 4.9 and 3.5 percent. Energy stocks bounced back, as crude cut earlier losses, with BG Group, BP and Royal Dutch Shell rising 0.9 to 1.7 percent.

Thomas Cook was among the top FTSE100 risers, up 4.7 percent as investors looked ahead to the company’s full year results due today. TUI Travel added 2.4 percent, with its results due Tuesday.
Kesa Electricals and DSG International lost 1.3 and 1.4 percent respectively as Goldman Sachs downgraded both mid cap stocks as well. Burberry added 1.7 percent after Goldman Sachs raised its rating on the stock to neutral from sell.

New York - US stocks tumbled on Friday afternoon as fears about the fallout from Dubai’s debt problems rattled Wall Street in a thinly traded half day session following Thanksgiving. The DJIA closed 154 48 points lower at 10309.92, the S&P500 lost 19.14 points to close at 1091.49 and the Nasdaq fell 37.61 points to close at 2138.44. All financial markets were closed Thursday for Thanksgiving and the stock market closed at 1p.m Friday. Trading volume was very light with many taking a five day weekend.

The Dubai government shocked investors late Wednesday by saying it needed at least a six month deferment on the $160bn in debt owned by Dubai World and Nakheel. It was uncertain how much exposure US banks have in Dubai. But influential bank analyst Richard Bove said in a note "it does not appear that American banks have any major direct impact from this event". Bank of America fell 3 percent to $15.47, while Citigroup tumbled 11 cents to $4.06. These two stocks were the most heavily traded on the NYSE.

Investors will closely be watching the results of Black Friday, the unofficial start of the crucial holiday shopping period. Retailers including Toys R Us, which opened its doors at midnight on Thanksgiving, were seeing shoppers taking advantage of doorbuster deals. Wal-Mart Stores, Best Buy and Sears were among the other retailers benefiting from a consumer that is strained, but willing to take advantage of substantial price cuts on key items.

The dollar rallied versus the euro and the yen, following the Dubai news. Comex gold for December delivery fell $13 to $1175 after ending Wednesday’s session at a record $1187 an ounce. US light crude for January delivery fell $1.91 to $76.05 a barrel on NYMEX. Treasury prices rose amid the weakness in stocks, lowering the yield on the 10 year note to 3.2 percent from 3.27 percent.

Tokyo - The Nikkei average rose 2.9 percent today, with bank shares surging as concerns about debt default in Dubai eased, while Canon Inc and other exporters gained after the yen retreated from a 14 year high on the dollar. The Nikkei 225 closed 264.03 points higher at 9345.55, regaining much of the ground it lost on Friday when it was hit by the yen’s appreciation to a 14 year high against the dollar and concerns about Dubai. Banks gained on short covering after recent extended losses due to worries that other banks might follow Mitsubishi UFJ and raise capital, with Dubai having added to the downward pressure.

Mitsubishi UFJ rose 8.6 percent to Y482, while Mizuho Financial Group surged 9.5 percent to Y162. Banks outside the Gulf said they were not heavily exposed to Dubai debt. Japanese financial institutions, including the three major banks, face loan exposures of about $1.2bn in Dubai, the Nikkei business daily reported on Saturday. But more news from Dubai will continue to be eyed, with Nakheel, saying it has asked for three of its listed Islamic bonds on Nasdaq Dubai to be suspended until it is in a position to inform the market more fully.

Economics

UK GfK consumer confidence (Nov) 00.01 gmt

Housing and equity prices continued to rise through November and, with fears concerning unemployment abating, consumer confidence is likely to improve further.

UK Mortgage approvals (Oct) 09.30 gmt

The BBA released data last week to show that this body of lenders issued 42,200 mortgages in October, up 98% on the level one year ago. The BBA has represented around 70% of total mortgage lending in the past year so this would translate to 59,000 total mortgage approvals in October. Consumer credit is likely to continue contracting.

US Chicago PMI (Nov) 14.45 gmt

The Chicago PMI rose by 8.1pts to 54.2 in October, with big gains being seen in both new orders and production. However, the latest industrial production report showed a decline in manufacturing output for the first time since June. Auto output fell 1.6% after big gains in the previous three months. Still, inventories remain low overall, which should help keep production in expansionary territory. November Chicago PMI is expected to fall back to 53.

Corporate

St Ives said underlying sales in the first quarter fell about 9 percent, but profitability remained in line with its expectations, helped by its cost cutting efforts. The company said the economic outlook remained uncertain with a number of its clients being cautious about the early part of next year. St Ives said there had been no significant changes to its financial position since August 1, and its cash flows remained strong. Its book business continued to benefit from steady demand and its outdoor advertising and events business was seeing an increase in activity, but volumes were still below prior year levels, the company said in a statement. However, magazine volumes have seen no signs of improvement and continue to be hurt by lower advertising spending, it said.

Immunodiagnostic Systems Holdings posted a three fold rise in first half pre-tax profit aided by higher sales of its vitamin D products, and said its year to date trading was in line with its expectations. The company also said overall, the prospects for the group remained bright as it continued to make good progress on all fronts. For the six months ended September 30, pre-tax profit rose to £4.6m from £1.6m. Revenue grew 56 percent to £16.9m. Sales of Vitamin D products more than doubled from last year, the company said. Chairman David Evans said "We continue to forge ahead with our plans for growth both organically and where we may deem it appropriate by acquisition".

Thomas Cook said it was confident it would meet its expectations for 2010 as summer booking remained in line with forecasts and reported 2009 pre-tax profit ahead of market expectations. The company made an underlying pre-tax profit of £308.2m in the year to end September down 0.4 percent on the previous year. That was ahead of analysts forecasts of £299m. CE Manny Fontenla-Nova said the group had delivered a strong performance in the face of a worldwide recession and the financial impact of the Swine Flu outbreak. They added "Recent customer research shows that UK consumers remain intent on taking their holiday’s abroad next summer and we continue to see strong growth in bookings to medium haul destinations such as Turkey and Egypt.  The group said, while a trend towards late bookings was still evident, its winter 2009/10 trading had continued to improve and summer 2010 bookings were in line with its expectations.

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

 

Posted: November 30th, 2009 under Asset Management.
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