Market Preview - 28 June 2011

UK Stocks: Likely to open higher

UK markets are likely to open in the green, with the FTSE 100 expected to open 30 points up. Key data on the agenda are Gross Domestic Product, Current Account and Total Business Investment.

Amphion Innovations, Northgate, Carpetright, Daisy Group and ACM Shipping Group are scheduled to report their results later today.
The Executive Chairman of CI Financial Corporation, the largest stakeholder in the TMX Group, and other business leaders in Canada have supported London Stock Exchange Group’s C$3.3 billion takeover offer for the Toronto Stock Exchange.
Rank Group has altered its stance on the bid from Guoco Group, stating that the shareholders, who aren’t worried about the latter canceling Rank’s stock listing status, should reject the offer.
Kesa Electricals has announced that its largest shareholder, Knight Vinke Asset Management, has raised its total stake in the company to 19.0%, from 18.0%.
Cairn Energy has announced that it will forego the non-compete fee to push through the sale of its stake in its Indian subsidiary to Vedanta Resources.

Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, markets are trading higher, on easing worries about the debt crisis in Greece. Tokyo Steel Manufacturing is trading up, after a broker upgraded its rating to “Buy” from “Neutral”. Ricoh is trading higher, amid news that the European Union would reduce tariffs on multifunction printers. At 6 am, the Nikkei is trading 1.1% higher at 9,681.8.
In South Korea, markets are trading higher, with gains in technology sector stocks. LG Electronics and Samsung Electronics are trading higher, after a survey by International Data Corporation indicated that US companies will increase information technology spending in 2011. In Hong Kong, markets are trading marginally lower, with banking sector stocks trading lower. HSBC Holdings and China Construction Bank Corporation are trading lower. In China, markets are trading lower, with banking sector registering losses, amid concerns that corporate earnings growth would slow due to policy tightening measures.

US Stocks: Futures trading higher
US stock index futures are trading higher at 6am, with the S&P 500 Index futures up 11.6 points.
Key economic releases today include Consumer Confidence, S&P/Case-Shiller Home Price Indices and Richmond Fed Manufacturing Index.
In corporate releases, Synnex Corporation, Shaw Group, Sealy Corporation, Progress Software Corporation and Arcadia Resources are scheduled to announce their results today.
In after hours trade yesterday, Nike advanced 4.5%, following better than expected results. Accenture advanced 6.8%, following the announcement that it would replace Marshall & Ilsley in the S&P 500 next month. Siga Technologies surged 11.8%, after Chimerix withdrew its protest against the award of a federal contract to Siga, following contract modification. PharmAthene gained 8.7%, after it announced that it had achieved an important technical milestone in its vaccine program.  Enbridge Energy Partners declined 3.6%, after it initiated an underwritten public offering of shares. Among other key losers, Life Partners Holdings lost 4.7%, while Achillion Pharmaceuticals dropped 4.0%.
Yesterday, the S&P 500 index gained 0.9%, amid receding worries over Greece, despite stagnation in US consumer spending. Amazon.com gained 4.5%, after a broker added the stock to its “Best Ideas” list. Technology sector stocks, Microsoft, Sandisk, Citrix Systems, F5 Networks and Adobe Systems advanced 3.7%, 3.7%, 3.5%, 3.2% and 3.1%, respectively. Financial sector stocks, Huntington Bancshares, Janus Capital Group, Bank of America, US Bancorp, Capital One Financial and American Express added 3.6%, 3.3%, 3.1%, 2.7%, 2.5% and 2.5%, respectively, amid optimism over new capital rules.

European Stocks: Expected to open higher
European markets are expected to open higher. The DAX is likely to open 45 points higher, while the CAC is expected to open 24 points higher.
Investors await German Consumer Price Index, Import Price Index, GfK Consumer Confidence and Swiss UBS Consumption Indicator.
Harboes Bryggeri, TK Development, Exel Industries, Carlo Gavazzi Holding and I Grandi Viaggi are scheduled to report their results later today.
Bayer’s CEO, Marijn Dekkers, has stated that the company plans to double its sales in China to about €6.0 billion by 2015.
BAA, the London-based unit of Ferrovial, has appointed Normand Boivin as its Chief Operating Officer for the London Heathrow airport.
Corporacion Financiera Alba has announced that it has acquired a 2.0% stake in Ebro Foods for about €51.9 million, taking its holding to 8.1%.
Deutsche Boerse has acquired Kingsbury International, which partners with the Institute for Supply Management, Chicago, to publish the Chicago Business Barometer.
 
Forex Overnight: EUR trading higher
The EUR is trading higher against the greenback this morning, amid easing worries over the Greek debt situation, after Germany welcomed proposals from French lenders on voluntary participation in the debt plan. Market expects that data scheduled to be released later in the day will indicate that an index of US home prices dropped for the tenth consecutive month in April.
The JPY is trading 0.1% higher against the USD, while it is trading marginally higher against the EUR.
At 6am, the EUR is trading 0.1% higher against the USD at $1.4297, while the GBP is trading 0.1% lower against the USD at $1.5970. The EUR is trading 0.2% higher against the GBP at £0.8952.
The AUD is trading 0.1% higher against the USD.

Macro Update
Papandreou calls for support, unions strike
The Greek Prime Minister, George Papandreou, called on lawmakers to support tougher austerity measures, as they began to debate a five-year budget plan that would determine whether Greece can avoid default.
Japan retail sales decline in May
On an annual basis, retail sales in Japan dropped a lower than expected 1.3% in May, compared to a 4.8% decline posted in the previous month.
Japan's Kan set to resign after budget passage
The Japanese Prime Minister, Naoto Kan, has agreed to resign from his post if the Japanese parliament passes a second supplemental budget before the end of the current session in late August 2011.
Imports for the next five years to cross $8 Trillion, says Chinese Premier
The Chinese Premier, Wen Jiabao, has stated that China's imports over the next five years are expected to exceed a combined $8 trillion.
South Korean current account surplus rises in May
South Korea’s current account surplus rose to $2.26 billion in May, the highest level in seven months, and compared to a revised $1.28 billion surplus posted in April.

Economic Calendar

Note: PPPHigh           PPMedium           PLow

Corporate Calendar