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Thursday, March 26, 2009

Stock Market News, Financial News - Mar 26, 2009

WTO head warns of slippage in protectionism fight

GENEVA (Reuters) - Global commerce risks being strangled by an incremental build-up of restrictions that could undercut policies to revive the world economy, the head of the World Trade Organisation (WTO) said on Thursday.

WTO Director-General Pascal Lamy said there were no signs of an imminent descent into high-intensity protectionism.  (More ...)

RBI to buy back $15.8 billion of bonds

NEW DELHI (Reuters) - The Reserve Bank of India (RBI) plans to buy back 800 billion rupees ($15.8 billion) of bonds from the market between April and September to soothe investors' nerves after the government detailed a massive borrowing plan.

The yield on the benchmark 10-year bond had jumped to two-week highs above 7 percent on Thursday, and opinion was divided on the potential impact of the central bank's intended buying. Bond markets are shut on Friday for a holiday.  (More ...)

Wall St clampdown in prospect, Europe data gloomy

By Gilbert Kreijger

AMSTERDAM (Reuters) - U.S. and European officials outlined plans for tough new financial rules on Thursday, part of efforts to stabilise the economy and curb the risk-taking that nearly wrecked the banking sector and set off a worldwide recession.

President Barack Obama's treasury secretary, Tim Geithner, was set to outline proposals in Congress that would create a powerful systemic risk regulator with authority to look deep into non-bank financial firms, such as hedge funds and private equity firms, officials said.  (More ...)

RBI: challenge to stem growth slowdown

By Manoj Kumar and Rajkumar Ray

NEW DELHI (Reuters) - The economic slowdown has been steeper than previously estimated and the challenge is to arrest it, but further fiscal stimulus will carry a cost, Reserve Bank of India Governor Duvvuri Subbarao said on Thursday.

His comments came soon after the government said it would tap markets for 2.4 trillion rupees ($47.4 trillion) of borrowings in the first half of 2009/10, two-thirds of its projected record borrowing for the full fiscal year that starts on April 1.  (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Market

Stocks Remain Mostly Positive In Late Morning Trading

After showing a strong upward move earlier in the session, stocks continue to see notable strength in late morning trading on Thursday. The major averages all remain in positive territory, adding to the gains posted in the previous session.

Transportation stocks are turning in some of the market's best performances, as traders express some optimism about signs of stabilization in the economy. Significant strength is visible among railroad stocks, which saw notable weakness on Wednesday.

A variety of other sectors have also shown strong upward moves over the course of the morning, with health insurance, steel, healthcare provider, and housing stocks posting notable gains.

On the other hand, banking stocks have moved back to the downside after ending the previous session mostly higher, limiting the upside for the broader markets. Tobacco stocks are also giving back some ground after trending higher in recent sessions.

In recent trading, the tech-heavy Nasdaq rose to a new high for the session, although it has given back some ground in the past few minutes. The Nasdaq currently remains up 29.50 at 1,558.45, while the Dow is up 44.45 at 7,794.26 and the S&P 500 is up 7.04 at 820.92.

US GDP worst for 26 years

The struggling US economy posted its worst performance since 1982 in the three months to December, government data confirmed today.

GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

The decline was spread across the whole economy with consumer and businesses suffering equally. Consumer spending fell by 4.3% rate with the large ticket items down by 22%. Housing fell 23% completing three straight years of decline. Business spending fell by 28% rate, with exports tumbling at a 24% rate.

Economists say the economy is still struggling, with current forecasts suggesting a 5% decline in the current quarter though some tentatively predict a recovery towards the end of 2009.

The IMF recently forecast the US likely to contract by 2.6% in 2009, taking it back to levels seen in the eighties, though it could rebound by the third quarter of 2010.

Canadian Market

Toronto stocks have rallied in early trading Thursday to recover some of the recent slide. Resource stocks have led the upward charge as commodity prices moved higher.

The S&P/TSX Composite Index has added 97.74 points or 1.11% to move at 8,895.18. Bay Street's main index has closed lower in each of the two previous sessions.

European Shares

Europe's top stocks are largely unchanged in midday trade, with the German Dax posting some gains and the French and Swiss markets both in red territory.

German consumer confidence fell slightly to 2.4 in April from a revised reading of 2.5 in the previous month. It was the first drop in seven-months.

Asia Markets

Indian market surges on global rally

Thursday, the Indian market closed higher for the fourth straight session amid strong global cues after better-than-expected economic data in the U.S. fueled hopes of an economic recovery in the world's largest economy.

Additionally, sustained buying by foreign funds in the past few days, hopes of rate cuts following a further retreat in the inflation rate and short covering on account of the expiry of the March series derivatives contracts aided the rally.

The inflation rate dropped to 0.27% in the 12 months to March 14 compared to 0.44% in the previous week, driven by a sharp fall in price of inputs and food articles and on account of high base effect. Significantly, prices of manufactured items showed a modest rise on a week-over-week basis.

The BSE Sensex opened higher at 9,740 and rose to a fresh 2-1/2 month high of 10,061 before finishing at 10,003, up 335 points or 3.47% over the previous close. Similarly, the S&P CNX Nifty rose 98 points or 3.28% to 3,082.

Commodities

Oil prices came under pressure on Wednesday but settled off earlier lows after the government’s weekly report showed a much bigger than expected build in energy stockpiles.

The Energy Information Administration said crude inventories rose 3.3m barrels last week compared with expectations of a 1.4m barrels increase.

Gasoline inventories fell by 1.1m barrels in the week while forecasts had been for a decrease of 900,000 barrels. Meanwhile distillate, which is used in diesel and heating oil, fell by 1.6m barrels, bigger than the 200,000 barrels decline expected.

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