Business and Capital Market Analysis !!!

Daily world financial news from Thomson Financial News
10 Nov 2008 15:12:56

US STOCKS-Wall St opens up on China's spending boost.

NEW YORK - U.S. stocks opened higher on Monday, with big U.S. exporters including General Electric leading gains following China's plan of a multibillion economic stimulus to shore up the world's fourth-largest economy.

The Dow Jones industrial average rose 211.95 points, or 2.37 percent, to 9,155.76. The Standard & Poor's 500 Index jumped 20.84 points, or 2.24 percent, at 951.83. The Nasdaq Composite Index lifted 31.32 points, or 1.90 percent, at 1,678.72.

AIG shares rose about 14 percent to $2.41 in response bailout plan. A year ago, AIG stock was trading at about $57 a share. It closed at $2.11 on Friday, off an all-time low of $1.25 in the hours before the federal government stepped in on Sept. 16 with an $85 billion loan.


Europe share

European shares rise, boosted by Chinese package.

FRANKFURT - European share prices rose by midday on Monday, boosted by mining stocks which jumped after China unveiled a nearly $600 billion economic stimulus plan to boost domestic demand.

At 1151 GMT, the FTSEurofirst 300 index of top European shares was up 2.8 percent at 940.64 points, on track for its eighth day of gains in the last 10.

The DJ Stoxx European basic resources index jumped 12.7 percent, tracking metal prices. Rio Tinto, Kazakhmys, Xstrata and Antofagasta recorded gains of 9-16 percent. Steelmaker ArcelorMittal jumped 16.6 percent, and a 5.8 percent rise in oil prices lifted BP, Total and Shell by 2.9-5.3 percent.

This market is very much oversold, we have been very cautious on the markets since January, the chances are very good for a bear market rally from now.

European shares have risen 15 percent over the past two weeks but are still down 38 percent this year, hammered by a credit crisis that piled up losses at top banks and slowed the economy.

Around Europe, Britain's FTSE was up 3 percent, Germany's DAX up 3.4 percent and France's CAC was 3.5 percent higher.

Santander fell 5.6 percent to 7.87 euros after it unveiled a surprise 7.2 billion euro rights issue at 4.5 euros a share.

Europe's biggest insurer Allianz fell 1.6 percent after reporting worse-than-expected third-quarter operating figures, and abandoning its operating earnings targets for this year and next.

Data released on Monday showed that Italian industrial output plunged 2.1 percent in September, the steepest fall in almost a decade, pointing to a recession which analysts said may prove deep and long lasting.


Asia at a Glance

Asian Market Summary

Japan's Nikkei ended 5.8 percent higher, while Hong Kong's Hang Seng was up 3.7 percent as of 0633 GMT.

The main TAIEX stock index fell 2.06 points to close at 4,740.27, despite gains in regional markets following moves by China and other G20 nations to fight the economic slowdown by lending support to exporters.

China A-shares closed sharply higher after the government announced a 4 trln yuan stimulus package to boost domestic demand. Construction-related stocks led an across-the-board rally after the State Council said last night that the government would spend about 4 trln yuan by the end of 2010 on social welfare, infrastructure, environmental protection and reconstruction projects.

Banks and property developers were also in demand after the government shifted its monetary stance to "appropriately loose."

The benchmark Shanghai Composite Index closed up 127.09 points or 7.27 pct at 1,874.80, the biggest percentage rise since late September. Around that time, the government announced a series of market-supporting measures, including the removal of stamp duty on share purchases and sovereign wealth fund support for shares of major state-owned banks.

Turnover nearly doubled to 56.87 bln yuan from 28.64 bln on Friday. The Shanghai A-share Index was up 133.40 points or 7.27 pct at 1,969.44, while the Shenzhen A-share Index rose 31.56 points or 6.43 pct to 522.66.

The Korea Composite Stock Price Index ended up 1.58 percent at 1,152.46 points, but shed part of an earlier 2.6 percent gain, partly due to a ratings outlook downgrade by Fitch.

The 30-share BSE index ended up 571.87 points at 10,536.16, its highest close since Tuesday, with all but two of components gaining. It rose as much as 6.1 percent during trade.

The benchmark has risen 37 percent from a three-year low hit on October 27, although it is still down 48 percent in 2008 to be one of the worst performers in Asia this year.


Commodities

Gold climbs as commodities rally on China

LONDON - Gold rose 2 percent in Europe on Monday, lifted by gains across commodities after China announced a $600 billion economic stimulus package, and by weakness in the dollar against the euro.

Spot gold hit a peak of $753.10 an ounce, before easing to $751.80/753.30 by 1021 GMT, against $735.95 late in New York on Friday.

Oil climbed more than $2 a barrel and base metals prices surged after the Chinese announcement, boosting interest in all commodities, traders said.

Copper surged 8 percent, nickel more than 10 percent and zinc and lead around 6 percent each following the news, clawing back a little of the substantial ground they have lost in recent months.

Oil also rallied, climbing 4 percent a barrel to above $163 a barrel as traders hoped the Chinese stimulus package would benefit demand.

Firmer crude prices tend to benefit gold because the precious metal is often bought as a hedge against oil-led inflation, and because they support interest in commodities as an asset class.

Among other precious metals, silver tracked gold higher to $10.30/10.38 an ounce from $9.99. Platinum prices climbed more than 3 percent as fears abated that the demand picture for industrial precious metals will continue to worsen.

The white metal is also being helped by fresh fears over supply after major producer Anglo Platinum said last week it may lose up to 200,000 ounces of output this year due to a smelter shut-down.

However, all the platinum group metals remain well off highs after posting sharp losses in recent months on waning demand from carmakers, who account for more than 50 percent of PGMs consumption.

Spot platinum rallied to a high of $875 an ounce, before easing to $861.50/881.50, against $845. Its sister metal palladium was at $226/231 an ounce against $220.


Source : advfn.com