Market Review: Markets cheer a surge in corporate deals

Forex: USD trading mostly lower












Source: Bloomberg

The USD is trading lower against most of its major peers. Traders mostly overlooked today’s data indicating a more than expected rise in the US pending home sales in March, as concerns over the nation’s housing sector persisted after data released last week showed a sharp drop in new home sales and a modest drop in existing home sales. Going forward, all attention will be on the outcome of the US Federal Reserve’s monetary policy meeting, non-farm payrolls and the preliminary reading of the nation’s first quarter economic growth scheduled later this week. Further, tomorrow’s Eurozone business climate data, German and French consumer confidence and the UK preliminary gross domestic product data will attract market attention. Meanwhile, geopolitical tensions in Ukraine will continue to sway market sentiment. The EUR is trading 0.4 percent and 0.1 percent higher against the JPY and the USD, respectively, while it is trading flat against the GBP.

UK Stocks: End mostly higher












Source: Bloomberg

UK stocks closed in the green buoyed by merger and acquisition news from the region.

The FTSE 100 gained 0.2 percent to close at 6700.2 and the FTSE 250 shed 0.4 percent to settle at 15826.2.

AstraZeneca (AZN) soared 14.4 percent after Pfizer confirmed that it is still interested in taking over the company. Sector peers, Shire (SHP) added 2.4 percent, while GlaxoSmithKline (GSK) slid 0.1 percent.

Premier Oil (PMO) added 0.8 percent after it announced oil and gas discoveries in Indonesia and Pakistan. Ophir Energy (OPHR) lost 0.8 percent as investors reacted to Premier Oil’s decision to reject its merger proposal.

Insurers, Resolution (RSL) and RSA Insurance (RSA) gained 1.2 percent and 1 percent, respectively.

On the downside, mining sector stocks, Rio Tinto (RIO), Glencore Xstrata (GLEN) and BHP Billiton (BLT) declined between 1.1 percent and 2.8 percent, tracking losses in the base metal prices.

US Stocks: Trading in positive territory












Source: Bloomberg

US stocks are trading in the green as investors cheered upbeat macroeconomic data.

The Dow Jones has risen 0.5 percent to trade at 16451.3 and the S&P 500 has climbed 0.6 percent to trade at 1873.7.

Pfizer (PFE) has gained 4.7 percent after the company confirmed media reports that it has made a renewed takeover approach to acquire AstraZeneca.

Roper Industries (ROP) has jumped 7 percent after reporting stronger than expected first quarter earnings and raising its full year earnings outlook.

Ford Motor Company (F) has advanced 1.1 percent after a broker raised its rating on the stock to buy from hold.

On the flipside, Newmont Mining Corporation (NEM) has slumped 6.2 percent after it ended merger talks with Barrick Gold.

Bank of America (BAC) has declined 4.8 percent after the lender stated that it will suspend its share buyback program and dividend increase.

European Stocks: Close in the green












Source: Bloomberg

European markets finished higher after the recent increase in merger activity lifted investors’ sentiment.

The DAX rose 0.5 percent to end at 9446.4 and the CAC advanced 0.4 percent to close at 4460.5.

Bayer AG (BAYN) climbed 3.3 after posting first quarter profit that surpassed market expectations and following news that it is considering the sale of its USD 10 billion plastics unit, Bayer Material Science.

Mologen AG (MGN) gained 1.3 percent after it revealed positive phase I clinical trial results for its cancer drug, MGN1703.

Medigene AG (MDG1) advanced 4.6 percent after it received a US patent for TCR-modified T cell immunotherapy.

On the contrary, Meda AB (MEDAA) tumbled 7.8 percent after it rejected a second takeover bid from Mylan.

Alfa Laval AB (ALFA) dropped 5.4 percent after the company posted lower than expected first quarter pre-tax profit.

Sandvik AB (SAND) lost 0.3 percent after a broker cut its rating on the stock to hold from buy, citing pressure on its profit margins.

Asia: Asia: Indices end mostly in the red












Source: Bloomberg

Asian markets finished mostly lower amid some disappointing corporate earnings reports and concerns that western nations might impose further sanctions on Russia in wake of heightened tensions in Ukraine.

In Japan, Japan Exchange Group (8697) and Honda Motor (7267) declined 6.2 percent and 4.5 percent, respectively, after both the companies forecast full year profit that trailed market estimates. Japan Display (6740) tumbled 15.9 percent after it reduced its full year profit estimate. On the upside, NTT DOCOMO (9437) rose 3.7 percent after it announced plans to buy back about JPY 500 billion worth of its shares. Koito Manufacturing (7276) soared 14.6 percent after it posted upbeat full year profit. The Nikkei 225 index dropped 1 percent to end at 14288.2.

In China, China Life Insurance (601628) declined 2.8 percent after posting a drop in its first quarter net income. In Hong Kong, Sands China (1928) retreated 3.3 percent following a report that the Japanese parliament might not pass a bill during this session to allow casinos in the nation. In South Korea, Pan Ocean (028670), CosmoAM&T (005070) and Dongbu Steel (016380) tumbled between 5.3 percent and 10.8 percent, featuring among the major laggards on the KOSPI Index.

Commodities: Trading lower

The Gold futures contract is trading 0.6 percent lower at USD 1293.1 per ounce as market participants speculated that ongoing tension in Ukraine might be shot-lived.

The Brent crude one-month futures contract is trading 0.9 percent lower at USD 108.6 per barrel following a report that Libya may soon reopen some small oil ports.

Macro Update

• US pending home sales rises more than anticipated in March
• US Dallas Fed manufacturing activity index expands more than expected in April

Economic Calendar