Market Preview - 21 June 2011

UK Stocks: Likely to open higher
UK markets are likely to open higher, with the FTSE 100 expected to open 6 points higher.
Investors await Public Sector Net Borrowing and CBI Industrial Trends Survey.
Carnival, Whitbread, RPC Group, Software Radio Technology and Halma are scheduled to report their results later today..
BP has announced that it reached an agreement with Weatherford International to settle potential claims between them, arising from the Deepwater Horizon accident.
Australian brewer, Foster’s Group has rejected an unsolicited bid offer of A$9.5 billion, from SABMiller, citing that it undervalues the company.
Riversdale Mining has indicated that its acquisition by Rio Tinto could help the latter to  potentially add 25 million metric tonnes of Mozambique coal to its annual output by 2016-17.
Kazakhmys has announced that it would seek a secondary listing in Hong Kong by way of introduction, with no shares being issued or sold.
According to the Financial Times, AstraZeneca is in final talks to sell Astra Tech, the Swedish healthcare and dental business, to Dentsply International.

Asia: Trading higher
Asian markets are trading higher this morning.
In Japan, Aeon is trading higher, after news indicated that its operating profit for the March-May period surged 30.0%. Kubota added value, after it forecast that its earnings would increase. Energy sectors stocks, Inpex Corporation and Japan Petroleum Exploration Company, are trading higher, in line with the rise in crude oil prices. Panasonic Corporation has retreated, after it projected a decline in its full-year net profit. At 6 am, the Nikkei is trading 0.4% higher at 9,390.0.
In South Korea, KB Financial Group and Shinhan Financial Group have gained. Technology sector stocks, LG Electronics and LG Display, are also trading higher. In Hong Kong, real-estate sector stocks have paced gains, with Hang Lung Properties and Sino Land Company trading higher. In China, automobile and cement sector stocks have advanced. China Construction Bank is trading lower, amid reports that Bank of America Corporation might sell half of its $21.0 billion stake in the bank.

US Stocks: Futures trading marginally higher
US stock index futures are trading marginally higher at 6am, with the S&P 500 Index futures up 0.2 points.
Key economic releases today include Existing Home Sales.
In corporate releases, Adobe Systems, Carnival Corporation, Jabil Circuit, Walgreen Company and American Software are scheduled to announce their results today.
In after hours trade yesterday, Eastman Kodak, Office Depot and Aruba Networks gained 1.5%, 0.5% and 0.4%, respectively. Country Style Cooking Restaurant Chain Company plunged 10.7%, after it announced lower-than-expected second-quarter revenue outlook. Achillion Pharmaceuticals declined 4.4%, after it initiated an underwritten public offering of an aggregate of 9 million common shares. Prospect Capital declined 3.3%, following its announcement that it is offering 10 million shares of its common stock in an underwritten public offering.
Yesterday, the S&P 500 index gained 0.5%, amid expectations that a solution will soon be found to Greece’s debt crisis. Caterpillar gained 2.3%, after a broker upgraded the stock. Biogen Idec climbed 4.1%, after a broker upgraded its rating on the stock. Healthcare sector stocks, Humana, Wellpoint, Celgene, Coventry Health Care, Baxter, and UnitedHealth Group advanced 3.6%, 3.2%, 3.0%, 2.8%, 2.7% and 2.6%, respectively. PNC Financial Services lost 2.0%, after it announced its plans to buy Royal Bank of Canada’s US retail banking operations for $3.45 billion. Banking sector stocks declined, with Morgan Stanley, Goldman Sachs, Wells Fargo, JPMorgan Chase and Bank of America dropping 1.9%, 1.5%, 1.4%, 0.8% and 0.8%, respectively.

European Stocks: Expected to open higher
European markets are expected to open higher. The DAX is likely to open 14 points higher, while the CAC is expected to open 6 points higher.
Investors await German and Euro zone’s ZEW Survey - Economic Sentiment and Swiss Money Supply.
K+S has announced that it would sell its garden fertiliser unit, Compo, to the European private equity investor, Triton.
Compagnie de Saint-Gobain has decided to postpone the initial public offering of its glass bottle business, Verallia, indefinitely, citing "adverse market conditions”.
Nokia has stated that it would launch its first mobile phone under Microsoft's Windows platform later this year, and that the product would be shipped in volume in 2012.
According to City A.M., UBS has hired more than 1,000 new employees for its investment banking operations in Greater China in the past 18 months.
Siemens’ Indian subsidiary has announced that it has won an order from Delhi Cargo Service Centre, to provide material handling solutions for a new cargo complex at Delhi’s international airport.

Forex Overnight: EUR is trading higher
The Euro is trading higher against the USD this morning, after European leaders reassured investors that a Greek default would be avoided. Additionally, the currency gained amid market expectations that data scheduled for release tomorrow, would indicate an increase in Euro zone’s industrial orders in April.
The JPY is trading 0.1% higher against the USD. Market expects data due today to indicate a decline in the US existing home sales in May.
At 6am, the EUR is trading 0.3% higher against the USD at $1.4341, while the GBP is trading 0.1% higher against the USD at $1.6213. The EUR is trading 0.2% higher against the GBP at £0.8846.
The AUD is trading 0.3% lower against the USD, after the RBA minutes indicated that there was no urgency for further monetary tightening measures.

Macro Update
IMF board to meet on 28 June 2011 to select new head
The International Monetary Fund's Executive Board is scheduled to meet on 28 June 2011 to begin the final selection of a new Managing Director.
Papandreou faces confidence vote
Greek Prime Minister, George Papandreou, is set to face a confidence vote in the Greek Parliament today.
Fitch might put US on review
Fitch Ratings has cautioned that if the US debt ceiling is not raised by 2 August 2011, then it might place the US on ratings review.
Japan pledges to support Eurozone
Japanese Finance Minister, Yoshihiko Noda, has indicated that the nation would continue to help and support Europe in its struggles to restrain the debt crisis, such as by buying bonds from a Eurozone rescue fund.
Further tightening coming, but no urgency, indicates RBA minutes
The minutes of the Reserve Bank of Australia's (RBA) latest meeting indicates that the Monetary Policy Board feels that further tightening would be required at some point, but there is no urgency for the same.

Economic Calendar

Note: PPPHigh           PPMedium           PLow

Corporate Calendar