Sunday musings: Lessons for small investors from Vishwamitra's dalliance with Menaka

Once upon a time, King Kaushika was touring his kingdom with a large army when he chanced upon the ashrama (hermitage) of Rishi (Sage) Vashishtha near a forest.

The Rishi greeted the King and offered his hospitality. Kaushika declined the offer because he thought it will be a great financial strain for Vashishtha to feed such a large army.

Vashishtha insisted and said it would not be a problem as he owned a wish-fulfilling (kamadhenu) cow, Sabala. Sure enough, Sabala arranged a grand feast which greatly pleased the King.

But a King won't be a King unless he coveted the possession of others. Kaushika felt that Sabala will be of more use to a King than a Sage. So, he offered ample monetary rewards to Vashishtha in exchange for Sabala.

The Sage politely refused the offer, which angered the King. He ordered his army to forcibly seize Sabala, at which point Sabala mournfully requested Vashishtha not to part with her.

Vashishtha suggested that Sabala raise an army of her own and defeat King Kaushika's soldiers - which she promptly did.

Kaushika decided to perform spiritual penance for 12 years. That pleased Lord Shiva, who granted him a wish. Being a King, who was humiliated by a humble Sage, Kaushika wanted the best weaponry that Lord Shiva could offer.

An emboldened Kaushika went on the attack and hurled his newly acquired divine weaponry at Vashishtha. But to no avail. Vashishtha's superior spiritual (yogic) powers repelled the attack easily.

Kaushika realised that physical powers were no match for spiritual powers. This time he went ahead with a more serious effort at penance to become the spiritual equal of Vashishtha.

In the process, he became Sage Vishwamitra. Lord Indra, King of Heaven, was disturbed by the severity of Vishwamitra's meditation and the yogic powers he might attain, and sent the beautiful apsara (celestial nymph) Menaka to seduce him.

Menaka did as she was instructed. Vishwamitra's spiritual resolve was overcome by the sheer beauty of Menaka. Their dalliance resulted in the birth of a daughter. 

Unfortunately, Menaka revealed to Vishwamitra the real reason why she had descended from Heaven. Vishwamitra was enraged by Lord Indra's devious move. He banished Menaka, abandoned their daughter and returned to his meditations.

[The daughter - named Shakuntala - was raised in Sage Kanva's hermitage. She later married King Dushyanta. Their child was called Bharata, after whom India was originally named.]

Moral of the story? There are two:

1. Thou shalt not covet others' possessions - which can be paraphrased as 'Keeping up with the Joneses'. It is a futile activity. Be happy with what you own. Greed isn't always good - particularly near a stock market top.
2. Dalliances should be avoided - regardless of the attractiveness of the opportunity.

The second moral is of particular importance to small investors. Remain steadfast in your discipline of maintaining a financial plan and following an asset allocation plan. Financial powers will follow inevitably albeit gradually.

Let not the Menaka's of the investment world - penny stocks, F&O trading, commodities trading, forex trading - lure you. Behind these Menaka's are the devious moves of the Lords (i.e. Professional Traders) of the stock/commodities/forex markets - designed to test your financial resolve.

Is the stock market defying conventional logic?

Interest rate has started coming down. So has inflation. WPI inflation is actually negative. IIP number is positive and inching up – indicating manufacturing growth.

Forex reserves are at an all-time high. Sales of medium and heavy commercial vehicles are rising – which is an indication of a recovering economy. Passenger car sales grew after 2 years of de-growth.

These are all signs of an economy that is returning to a path of growth. As per conventional logic, a growing economy should lead to a rising stock market.

So, why is the stock market defying logic? It is like asking: “Why do mosquitoes sting?”  The answer is: “It is their nature to do so.”

Experts and analysts try their level best to explain the reasons for a market correction. As if they really know.

Some said that expectations of poor Q4 results led to the correction. But everyone has been expecting poor Q4 results for quite some time.

Others said that PSU divestments and IPOs are sucking out cash from the secondary market. Weren’t these same experts saying a couple of weeks back that a lot of ‘cash is waiting in the sidelines’? 

(By the way, ‘cash waiting in the sidelines’ is one of those enduring myths in the market. Unless the cash gets invested in FPOs or IPOs, it always remains in the sidelines. Think about it.)

One talking head on a business channel said: “The market has been boosted by a liquidity driven rally.” Wonder what kind of a rally will occur without any liquidity!

The market has a tendency of going against consensus estimates and expectations. Which increases the probability that Q4 results will throw up some positive surprises.

IndusInd Bank has declared very good results. TCS came out with a decent set of numbers – if you look beyond the one-time bonus payment to employees.

Smart investors look for opportunities to buy during such corrections. That doesn’t mean you need to jump in feet first. Do your homework, be patient and wait for opportunities.

Have you looked at hospitality sector stocks lately? Most small investors are shunning them. The “e-Visa on arrival” scheme should be a huge boon for the sector.

Is this a good time to invest in gold? – a guest post

After a decent rally from the low touched in Jun ‘12, Sensex seems to be stuck in a range – neither moving up much, nor falling down. Retail participation has been low. Those who missed the rally may be waiting for a deep correction to get in. Others are probably waiting to jump in once the index hits 20000.

In this month’s guest post, Nishit argues in favour of gold as an investment avenue because the domestic and global economy is in doldrums.

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Gold in Rupee terms has given just about 5-6% return in the past year. Now is a good time to look at the future prospects of Gold as an investment.

The Gold we buy in India is dependent mainly on two factors: the price of Gold in US Dollars, and the exchange rate of Indian Rupee vs. US Dollar. It is a big myth that price of Gold goes up during the Indian wedding season. Even though India is a large consumer of gold, there are other global factors driving the price of Gold.

What has been happening in 2012 is that the price of Gold in US$ and Indian Rupee have been going in opposite directions. When Rupee weakened to the 56-58 range, the price of Gold fell in Dollar terms. Also, when price of Gold rose in US$, the Rupee also strengthened.

Fundamentally, Gold is treated as a safe haven. Whenever there is a global crisis or if economies go bankrupt, the attraction of Gold goes up. 2012 was a relatively stable year and hence the price of Gold is stuck in a range between US$ 1550-1800 per ounce.

The US fiscal cliff and Eurozone sovereign defaults - if and when they happen – will cause the price of Gold to rise. Another benchmark for gold is how many barrels of oil can be purchased by 1 ounce of Gold. Currently it is about 16 barrels, which is the long-term average. If oil’s price begins to rise, gold’s price will also rise.

The exchange rate of Indian Rupee is dependent on foreign inflows. Once the inflow dries up, the price of gold will start going up in Rupee terms.

So, the price of Gold for Indians is dependent on:

1. Rupee (watch the FII inflows)
2. Price in US$ (watch related commodities like crude oil, and foreign economies)
3. Performance of Dow Jones and other foreign indices

Also, just to slip in a bit of technicals, US$ 1800 has been a resistance level for more than a year and hence, expect a rally when gold’s price closes above 1800 for 3-4 days.

For the price of Gold to rise in the current scenario, the global economy has to either weaken or boom dramatically for speculation to take place. A boom seems unlikely and hence the most likely scenario is the Western economies slipping down into recession again.

One should be invested in Gold to the extent of 10-15% of one’s portfolio. It acts as a hedge against inflation simply because it guards against Rupee weakening. Once upon a time, when Rupee was strengthening and the exchange rate was heading towards Rs.40 to US$ 1, it did not make sense to add Gold.

If the Indian economy does as badly as in late 2011, it may be sensible to add Gold. In a nutshell, whenever any economy is doing badly, either domestic or global, it is a good time to invest in Gold. Even in 2008, Gold’s price shot up after the equity markets tanked.

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(Nishit Vadhavkar is a Quality Manager working at an IT MNC. Deciphering economics, equity markets and piercing the jargon to make it understandable to all is his passion. "We work hard for our money, our money should work even harder for us" is his motto.

Nishit blogs at Money Manthan).

Are the stock and currency markets interdependent?

The BSE Sensex index continues to move in a sideways consolidation range between 13500 and 15600, apparently unaffected by the RBI's recent policy announcement of keeping interest rates unchanged.

A prolonged period of sideways movement puts investors in a quandary. Those who missed the rally are itching to get in. Those who were smart enough to invest at lower levels are sitting on big profits, but worried about a crash around the corner.

This is a good time to do nothing - as far as transacting in the stock market is concerned. Use the lull period to do research on individual stocks and brush up on the fundamentals of money supply and how they affect different markets.

The short answer to the question is: Yes, both markets are interdependent locally and globally. The long answer follows.

There is little direct relationship - most of it is through indirect effects of money flows, global businesses, inflation rates and interest rates. It may not be out of place to mention here that the forex market is massive, about $1.5 Trillion per day - a week's trading is equivalent to twice the annual turnover of the New York stock exchange! Interested readers may want to read this article.

Think about the Dow, which had a strong rally last week. Investors from outside the USA, whose domestic markets may not be performing so well - France, for instance - may decide that it is time to enter the US market.

They convert a sackful of euros into US dollars. Depending on the size of the sack, the euro will go down in value relative to the US dollar. May be currency traders figure out that some thing is going on and start to buy US dollars and sell euros.

Investors in Germany decide to join the party. More euros are sold to buy dollars to invest in the US market. With foreign investors pumping in money, both the dollar and the Dow start to rise, as the euro drops.

The opposite happens if the Dow tanks. Foreign investors pull out of US stocks, convert dollars to euros that makes the euro appreciate and the dollar depreciate. The logical conclusion should be that the level of a stock index is directly proportional to the value of the underlying currency.

But it is more complicated than that. Let us take the example of CocaCola. It now sells more outside the US than within the US. For argument's sake, let us assume that the bulk of its sales are from the euro countries. If the dollar tanks and euro appreciates, CocaCola's US sales and profits may suffer but their higher euro-zone profits will more than cover the gap.

CocaCola may declare better Q2 profits, as may IBM and Microsoft and others if they sell more in the euro-zone. End result? The Dow may shoot up if the index components make super profits, while the dollar tanks.

With FIIs pumping in money, the BSE Sensex index nearly doubled from its Mar '09 lows. Logically, the Rupee should have gained against the US dollar. But it is at a lower level now than a year back.

I have a couple of questions for readers:

Why do you think the Rupee depreciated when the Sensex went up?

Why do you think the RBI left interest rates unchanged?

(Thanks to reader Rajeev, for suggesting that I write something about the interdependencies of the different markets. This post is already too long. I plan to write about the bond market and commodities market in future posts.)

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Now, learn portfolio strategies from a game of stud poker

One of the best ideas for managing your portfolio on an ongoing basis is to treat each stock (or fund) in your portfolio as a hand in a game of stud poker. Not my idea. Peter Lynch mentioned it in his book: "One Up on Wall Street".

Stud poker is a 'man's game', pitting strong-willed men with nerves of steel and expressionless faces against each other across a card table. The game has been immortalised in several Hollywood films.

Two of them - my favourites - come to mind. The old pro, Edward G. Robinson playing against the new kid on the block, Steve McQueen, in "The Cincinnati Kid". And a sophisticated Robert Shaw being taken for a ride by a bumbling Paul Newman in "The Sting".

The game - for the uninitiated - is simple enough. A card is dealt face-down, which can only be seen by the player to whom it was dealt. This is immediately followed by a second card dealt face-up to each player. All players get to see the face-up cards. A round of betting follows. Each bet is for a specific amount.

A player has the option to 'fold' (i.e. take no further part, if the cards he has been dealt are not to his liking); 'call' (i.e. stay in the game by betting an equal amount) or 'raise' (i.e. increase the bet by a pre-determined amount). Every time a player raises the bet, another round of betting follows.

The process is repeated three more times, as a card is dealt face-up to each player remaining in the game. After all five cards for each hand have been dealt (one face-down and four face-up) and the betting is concluded, the players remaining in the game show their hands to the others. The player with the best five card combination wins.

I'm not a gambling man, nor do I advocate a gambling mentality in the stock market. But the analogy - that each stock (or fund) in your portfolio is akin to a hand at stud poker - seems very apt.

The face-down card is like some knowledge or information you may have about the company that may not be known to the general public. Each face-up card is some bit of financial news or company-specific information that becomes available in the market.

As each 'card' is dealt, you need to take some action as an investor. If it is pretty bad news - like the Satyam fraud, or Punj Lloyd's overseas subsidiary delaying a project and incurring a huge penalty - you should fold (i.e. sell) that particular hand.

If it is so-so or good information - like Larsen and Toubro bagging a new order, or Tata Investment declaring a marginal profit and matching last year's dividend - you may hold your stock (or fund).

If it is better news - like 3i Infotech declaring increased profits when most IT companies were struggling in the down turn - raise the bet (i.e. buy some more).

You'll need the mental and physical discipline of tracking each bit of information about each of the stocks (or funds) in your portfolio, analysing the consequences and filing it properly at a place from where it can be retrieved easily.

It is not rocket science, but it has to be followed diligently on a regular basis - at least once a week. That means not only tracking company results and announcements, but also the forex rates and macro-economic and political news to understand the implications and likely effects on your portfolio.

Many intelligent individuals never succeed in their market investments. A probable cause can be the lack of time and/or discipline in following a regular process of updating information about their portfolio holdings.

Life becomes a lot easier if you manage to limit your holdings to 10-12 stocks or 5-6 mutual funds. Keeping track of fewer companies improves your chances of being able to move quickly as the situation demands.

Weekly tracking of a smaller number of companies (or funds) means you will tend to remember the important bits of information necessary for taking buy-sell-hold decisions.

Stock Market News, Financial News - Mar 27, 2009

Heavy borrowing could pressure rates - officials

By Rajesh Kumar Singh and Manoj Kumar

NEW DELHI (Reuters) - India could overshoot its annual borrowing target in the 2009/10 fiscal year if more fiscal stimulus is rolled out to revive a slowing economy, and this will put pressure on interest rates, senior officials said on Friday.

Policy advisers also said the economy will fare significantly worse in 2009 than in the previous year, and more doses of fiscal and monetary policy may be needed to boost demand and lift growth.  (More ...)

Will Satyam be an albatross around Larsen's neck?

By Sumeet Chatterjee

BANGALORE (Reuters) - Larsen & Toubro is seen as the front-runner to acquire fraud-tainted outsourcer Satyam Computer Services Ltd but a potential purchase could bring more pain than gain.

Not only will the acquisition be a tricky one due to uncertainty about Satyam's accounts and potential legal liabilities from U.S. lawsuits but also it would distract Larsen from its main engineering and construction business.  (More ...)

Reliance signs gas deal with fertiliser firms

NEW DELHI (Reuters) - Reliance Industries on Friday signed deals with 12 fertiliser firms to sell about 15 million standard cubic metres a day (mmscmd) of gas from its block off the country's east coast. Supplies will start from mid-April, Reliance said. 

The firms will pay Reliance a marketing margin of 13.5 cents per million British thermal units (mmBTU) for the gas, said Satish Chander, Director General of Fertiliser Association of India. The margin is in addition to the government-set price of $4.2 per mmBTU for the gas.       (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Market

Stocks Moving Lower As Traders Cash In On Recent Gains

Stocks are showing notable weakness during mid-morning trading on Friday, as investors take profits from the recent rally and digest some mixed economic news. With the decline, the Nasdaq has once again slipped below the unchanged line for the year-to-date period.

On the economic front, the Commerce Department released its report on personal income and spending in the month of February. While the report showed an increase in spending that came in line with estimates, income fell by a little more than expected.

The report showed that personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, the Commerce Department said that personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

The final reading of the Reuters University of Michigan's consumer sentiment index for March was also released earlier, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.

In other news, President Barack Obama is meeting today with the CEOs of JP Morgan, Citigroup, Goldman Sachs and other banks, as well as executives from industry associations, to discuss the economy and the administration's proposals to increase regulation of the financial system.

Additionally, President Obama will soon unveil the results of a federal examination of the restructuring plans from General Motors and Chrysler, a condition for the auto-makers to rece ive more government capital.

White House Press Secretary Robert Gibbs said the details would be announced before the President departs for the G20 Summit in London on Tuesday.

"The President, as part of viability plans from both GM and Chrysler, is required by the 31st to give an update on those plans and where our government sees them, and we'll be doing that also in the next few days," Gibbs said.

The major averages pulled back to new lows for the session in recent trading, but they have regained some ground since then. The Dow currently remains down 128.39 at 7,796.17, the Nasdaq is down 29.14 at 1,557.86 and the S&P 500 is down 13.55 at 819.31.

European Shares

Europe's top stocks have swung into the red in choppy trade on Friday, led lower by a weak energy sector. U.K.'s FTSE 100 Index is showing a loss of 0.9 percent, while the French CAC 40 Index and the German DAX Index are falling 2 percent and 2.1 percent, respectively.

Asia Markets

The Japanese stock market took a pause for breath Friday bringing to an end nine successive days of rises for the Topix index.
Nevertheless, the Nikkei 225 index reached its highest point since 9 January during the session before easing back to 8,626, down 9 points. Hong Kong's Hang Seng Index ended the day up 0.1 percent.

Commodities

Oil and gold rise after gloomy GDP data
The worst US GDP data for 26 years sent investors scurrying for the safety of gold, pushing the April futures contract up to $940, up $4.20 on the day.

US 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.

Meanwhile, the appeal of gold as a safe asset was further enhanced by news that the total number of US unemployed rose to a record 5.56m, although the dollar’s strength limited the extent of gold’s gains.

The oil price was also on the rise, with the April contract rising above $54 a barrel, reversing Wednesday’s losses when the Energy Information Administration revealed that crude inventories rose by 3.3m barrels last week.

Forex
Dollar dominant
US GDP data that was not as bad as feared prompted support for the greenback Thursday. Though US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2%, it was still better than consensus forecasts from economists of a 6.6% fall.

Sentiment towards the dollar was also boosted by the relative success of the US Treasury’s auction of seven-year notes. The Treasury sold $24bn of notes at a yield of 2.384%.

The euro was out of favour after data from the European Central Bank (ECB) showed a slowdown in the growth of private sector lending. The aggregate value of loans was 4.2% higher in February than a year earlier, compared with a 5% year-on-year g ain in January. The figures are likely to add pressure to the ECB to cut interest rates some more this year, which will diminish the appeal of the euro.

Sterling also fell back in New York trading despite a good response to the sale of index-linked gilts due to mature in 2022, which was oversubscribed. The auction result came as a relief after the flop the previous day of the auction of 40-year gilts.

The pound fell back by almost a cent, to $1.4444 in New York, having earlier made headway in London trading, where it reached $1.4562. However, even in London the currency finished below its best levels of the day after UK retail sales data revealed a far bigger than expected 1.9% drop in sales from the previous month.

ADVFN World Daily Markets Bulletin - Mar 16, 2009

US Stocks at a Glance

Major Averages Remain Mixed In Mid-Morning Trading

Stocks are turning in a mixed performance in mid-morning trading on Monday, as traders react to Federal Reserve Chairman Ben Bernanke's 60 Minutes interview as well as some weaker than expected economic data.

In economic news, conditions for New York manufacturers got significantly worse in March, according to a report released by the New York Federal Reserve, with the index of activity in the state's manufacturing sector unexpectedly decreasing compared to the previous month.

Additionally, the Federal Reserve's industrial production report showed that industrial production fell by 1.4 percent in February compared to economists estimate of a 1.3 percent decline. The decrease reflected a steep drop in utilities output amid a swing to above-average temperatures.

In other news, Fed Chairman Ben Bernanke gave the first televised interview from a current Fed Chairman in 20 years. On 60 Minutes over the weekend, Bernanke reiterated that he sees the U.S. coming out of recession this year.

While he sees the recession ending before 2010, he noted that the unemployment rate would likely continue to climb, moving into double-digits before getting better. However, he pledged that another failure like Lehman Brothers would not be allowed to happen.

The major averages are currently stuck on opposite sides of the unchanged line, with the Nasdaq posting a notable loss. While the tech-heavy Nasdaq is down 9.77 at 1,421.73, the Dow is up 43.72 at 7,267.70 and the S&P 500 is up 6.48 at 763.03.

Canadian Market

Toronto Stocks Up For Fifth Straight Session - Canadian

Canadian stocks are in the green for a fifth straight session on Monday as strength in the mining and financial sectors has outweighed a drop in energy stocks.

The S&P/TSX Composite Index is up 63.03 points or 0.75% to 8,366.42. The index is on target for its best close in more than a month.

Mining stocks are up 3.25% to lead the way. Lundin Mining has rallied 6.7% after the company said it will remove its shares from from the New York Stock Exchange in a cost-cutting effort.

Financial stocks are up 2.8% as all of the big six banks are posting notable gains. Toronto-Dominion has climbed 3.5%, Scotiabank has added 3.3% and CIBC is up 3.2%.

Ensign Energy Services has declined 2.7% after the provider of energy drilling services reported fourth-quarter net income of C$73.83 million, or C$0.48 per share, compared with C$72.56 million, or C$0.48 per share, a year ago.

Energy stocks have dropped 0.5% as crude oil is down $1.63 to $44.62 after the Organization of Petroleum Exporting Countries agreed to leave output unchanged.

Enbridge is up 1.2% after the company said it agreed to sell its indirect 24.7% stake in the Oleoducto Central pipeline to Colombian oil and gas firm Ecopetrol SA for about US$400 million.

In other corporate news, Agrium is up 0.5%. The agricultural nutrients maker Monday said it commenced an exchange offer for all outstanding shares of CF Industries Holdings, Inc.

Sino-Forest Corp. is up 1% after the commercial forest plantation operator,reported fourth-quarter net income of $95.5 million or $0.51 per share, up from $55.5 million or $0.30 per share in the same period last year.

YM BioSciences Inc. is down 1.5%. The company announced the enrollment of the first patient into its multinational trial of nimotuzumab for the treatment of patients with non-small-cell lung cancer.

On Friday, the index added 21.12 points or 0.25% to end at 8,303.39. This marks the first finish above 8,300 since Feb. 17.

European Shares

FTSE hits new high for March
Market Movers
techMARK 1,145.85 +2.89%
FTSE 100 3,846.38 +2.47%
FTSE 250 6,278.27 +1.88%

The sun is shining on London’s leading stocks today with the FTSE 100 rising above the level it had sunk to at the end of February for the first time this month. Sentiment has been boosted by an interview given by Federal Reserve chairman Ben Bernanke on US TV Sunday night in which he said the US recession could end this year if the government’s medicine for the ailing banking sector works.

Barclays is sharply higher after it confirmed weekend reports that talks are underway with a number of parties over a sale of iShares, its exchange-traded funds business. The bank also confirmed it is holding talks with HM Treasury and FSA regarding its potential participation in the UK's Asset Protection Scheme. Barclays added that its businesses overall have had a strong start to 2009.

Rexam is another stock with a double-digit percentage rise under its belt after Credit Suisse upgraded the stock to “out-perform” from”neutral”.

Oil stocks are moderately lower after OPEC’s decision over the weekend not to cut output quotas. In contrast, heavy oil users such as Thomas Cook, British Airways and FirstGroup attract support on expectations that the OPEC decision will head off a resurgence in oil prices.

Rio Tinto is lower on weekend comment that some of its big shareholders are intent on scuppering the refinancing deal with Chinalco.

Bus and rail group Stagecoach's trading since the end of October has been on track to meet management expectations. The UK bus division has seen 9% like-for-like (LFL) revenue growth in the 44 weeks to 1 March 2009, while the UK rail division (excluding East Midlands Trains) saw 6.7% LFL growth. In North America, the company has seen 6.8% LFL growth in the 10 months to 28 February 2009.

Shares in industrial property group Brixton surged after the property group reassured the market it was compliant with its banking covenants at the end of 2008, despite a sharp deterioration in its financial position. The firm reported a pre-tax loss of £768.8m for the year, compared with a profit of £58.2m the previous year. Net asset value per share fell 47% to 290p.

Many market observers were expecting Brixton to accompany its results with a rights issue or some other form of fund raising but the company said it was still considering a wide variety of options aimed at strengthening its balance sheet.

Insulation and building materials supplier SIG is another company considering a range of options, including a potential equity raising. Reports at the weekend suggested SIG had spoken to investors about a possible £250m-£300m rights issue at a heavy discount to the current share price. Full-year results are due tomorrow, though it is unclear if a cash call will accompany the figures.

A consortium led by Interserve has been named as Selected Bidder by Sandwell Council for a big schools development project under the government’s Building Schools for the Future initiative.

Gulf of Mexico-focused oil and gas explorer and producer Leed Petroleum posted a large increase in production over 2008 and said it was in a strong position to continue growing. The firm posted a pre-tax income of $3.6m on revenues of $15.1m, as it ramped up production at its Eugene Island field.

Hopes of a big contract for Aero Inventory have been dashed as the company said it had withdrawn from discussions with a major airline having been unable to agree on satisfactory commercial terms for the proposed deal.

Emerald Energy, the oil explorer focused on South America and the Middle East, is awash with cash after a strong trading performance in 2008. Net cash flow from operations tripled to $64.7m from $21.6m in 2007. Cash and cash equivalents at the end of 2008 stood at $74m, up from $40m at the end of 2007, after the company saw profit before tax soar from 2007’s level of $8.59m to $52.45m.

FTSE 100 - Risers
Barclays (BARC) 89.70p +21.05%
Rexam (REX) 269.75p +12.75%
Prudential (PRU) 287.75p +10.35%
London Stock Exchange Group (LSE) 449.25p +9.24%
Thomas Cook Group (TCG) 229.00p +7.64%

FTSE 100 - Fallers
Tullow Oil (TLW) 762.00p -1.68%
Kazakhmys (KAZ) 318.50p -1.55%
Amec (AMEC) 540.50p -1.10%
Rio Tinto (RIO) 2,060.00p -0.82%
RSA Insurance Group (RSA) 135.00p -0.74%

FTSE 250 - Risers
Brixton (BXTN) 17.50p +18.64%
SIG (SHI) 135.50p +15.32%
Intermediate Capital Group (ICP) 228.00p +11.76%

FTSE 250 - Fallers
Gem Diamonds (GEMD) 155.00p -3.73%
Wellstream Holdings (WSM) 388.25p -3.54%
Brit Insurance Holding (BRE) 188.50p -3.33%

Asia Markets

Indian market continues winning streak

Monday, the Indian market recovered from its day's lows to end sharply higher for the day. While easing fears about the U.S. banks and net buying by foreign funds on Friday helped the market open firm, investors took profits in early trading amid a mixed trend in the Asian markets and an uncertain outlook for the global economy.

However, stocks bounced back later in the afternoon after the European markets opened on a positive note. The higher US index futures, which pointed towards a firm opening on Wall Street Monday and the strengthening of the rupee to near a two-week high also improved investor sentiment.

The BSE Sensex opened at 8,794 and slipped to the day's low of 8,697 in early trading. The index since then bounced back sharply and closed near the day's high at 8,944, up 187 points or 2.13% over the previous close. Meanwhile, the S&P CNX Nifty rose 58 points or 2.13% to 2,777.

Second-line stocks also showed significant gains. The broad-based BSE 500 index, the small-cap and the mid-cap indexes advanced around 2.20% each. On the BSE, the market breadth was extremely positive, with gainers outnumbering decliners by 1611 to 847.

Stocks across the sectors received good support. Realty, oil/gas and banking stocks were the top gainers.

Jaiprakash Associates (up 8.96%), Mahindra & Mahindra (up 8.48%), Ranbaxy Laboratories (up 6.82%), Reliance Communication (up 6.74%), DLF (up 6.16%), ICICI Bank (up 4.52%), State Bank of India (up 3.65%)and Sterlite Industries (up 3.52%) were some of the prominent gainers.

Twenty-five out of 30 Sensex stocks finished in positive territory, while Sun Pharma, Maruti Suzuki, Grasim Industries, Infosys and Reliance Infrastructure ended in the red.

Aviation stocks surged higher after data released by the Civil Aviation Ministry showed a marginal improvement in domestic passengers traffic for February. Kingfisher climbed 9.83%, JetAirways jumped 17.16% and SpiceJet gained 3.15%.

Realty stocks showed handsome gains, leading the rally. Among the major gainers in this space, Mahindra Life jumped 22.03%, Akruti City soared 19.50%, Parsvnath climbed 6.17% and DLF added 6.16%.

Stocks of oil-exploration companies closed mixed after crude oil price fell about 2.5 percent in Asian trading on Monday. Reliance Industries gained 3.45% and ONGC advanced 1.32%, but Cairn moved down 0.21%.

On the other hand, state-owned oil firms, namely HPCL surged up 8.30%, BPCL jumped 4.40% and IOC added 2.96%.

Commodities

Oil falls by nearly $1 a barrel
Crude oil futures fell nearly $1 on speculation that oil cartel OPEC will not announce further output cuts at its weekend meeting in Vienna.

Reports suggest OPEC is under pressure to keep oil prices lower to help an economic recovery. Since September the group, which controls about a third of the world’s oil production, has reduced production by 4.2m in an attempt to stem falling oil prices.

According to reports the group has an 81% compliance rate of reaching its reduction target.

US light crude oil for April delivery fell 78 cents to settle at $46.25 a barrel on the New York Mercantile Exchange. In a volatile week for oil prices crude registered gains of 1.6%.

Gold prices rose above $930 an ounce amid strong demand for ETF holdings. The precious metal has endured a bumpy ride in recent weeks with prices rising above $1,000 an ounce and then falling quickly to profit taking.

Traders say demand for gold will slow as it inches towards the $1,000 level again and as demand for safe haven assets eases as investors reassess the economic outlook. COMEX gold for April delivery rose $6.10 to settle at $930.10 an ounce.

Silver for May delivery rose 27 cents to $13.22 an ounce while April platinum advanced 40 cents to $1,063.60 an ounce.

Forex

Euro broadly higher
Demand for the dollar’s safe haven qualities faded on Friday with renewed risk appetite boosting the euro and sterling.

The single market currency also benefited from Thursday’s decision from the Swiss central bank to stop the Swiss franc's advance against the euro.

The euro consolidated gains against the greenback on Friday and early in the session hit a two-week high against the dollar before easing slightly. The euro also gained around 0.4% to 126.43 yen.

The euro has recently been under pressure by concern about the euro zone’s exposure to bad debt in Eastern European banks.

The dollar rose against the broadly weaker Japanese currency after a report showed the US trader gap narrowed to its smallest level since October 2002. The yen’s attractiveness as a safe haven currency has been fading as traders mull the country’s deepening economic troubles.

Sterling took its cue from buoyant markets on Friday and investors turned to riskier currencies. The pound rose about 0.50% to $1.4005 after reaching a six-week low against the US currency earlier in the week at $1.3653.

The UK currency was also boosted as the Bank of England continues will its quantitative easing plans, which is hoped will stimulate lending.

ADVFN World Daily Markets Bulletin - Mar 12, 2009

US Stocks at a Glance

Major Averages Bounce Firmly Into Positive Territory

While stocks showed a notable decline over the course of early trading on Thursday, the markets have shown a substantial turnaround since then. The major averages have bounced well off their lows for the session and moved firmly into positive territory.

The volatility that has been in morning trading comes following the release of some mixed economic data. While a Commerce Department report before showed a much smaller than expected drop in retail sales, the Labor Department reported a notable increase in weekly jobless claims.

Peter Boockvar of Miller Tabak said, "Some will argue that the retail sales upside is more relevant than the claims data, as employment is a lagging indicator, but its way to premature to assume a bottom in retail sales, especially with leverage levels that are still way above average."

In other economic news, the Commerce Department released its business inventories report for January, showing that inventories fell 1.1 percent during the month. The decrease was slightly steeper than the 1.0 percent decrease expected by economists.

On the corporate front, General Electric announced that S&P downgraded the company's long-term credit ratings to AA+ from AAA, with a "stable" outlook. GE stated that it does not anticipate any significant operational or funding impacts from this change.

The major averages have pulled back off their highs in the past few minutes, although they currently remain firmly positive. The Dow is currently up 48.18 at 6,978.58, the Nasdaq is up 3.72 at 1,375.36 and the S&P 500 is up 6.99 at 728.35.

Forex

Dollar falls as risk appetite returns
The dollar fell against major currencies as its safe haven appeal faded and traders turned attention to global equities and riskier currencies instead.

European, US and Asian stock markets all managed gains Wednesday on hopes that a global economic recovery is not too far away.

Economic data from China however poured cold water on some of that optimism. An official report showed a surprise 15% decline in February imports as demand from China continues to slow.

The dollar index fell to 87.719 from 88.627 in late US trading Tuesday. The dollar fell to 97.48 yen from 98.70 yen in the previous session.

The euro rose against the dollar, after a weak start to Wednesday’s session, as European stock markets settled in the blue. The euro was the main beneficiary of increased risk appetite Wednesday. The euro rose to $1.2828 from $1.2679 Tuesday.

Sterling meanwhile remained under pressure against the euro on ongoing concern about the outlook for the UK economy.

Traders were little moved by news that the Bank of England pumped almost £2bn of extra money into the financial system in the hope it will get banks to lend more money. The move is part of its £75bn programme of ‘quantitative easing’ to boost the British economy.

Sterling rose against the dollar to $1.3851 from $1.3743 while the euro rose 0.8% to 92.90p against the pound after hitting a high of 93.01p.

Commodities

Oil settles below $43, gold above $900
US crude oil dropped 7% on Wednesday after a weekly government report showed US crude supplies rose by 700,000 barrels last week instead of the 1m barrel decrease expected by analysts.

US light crude oil for April delivery settled down $3.38 to $42.33 a barrel on the New York Mercantile Exchange. Concern about a continuing slump in demand weighed on crude prices after a separate report from China showed a surprise 15% decline in February imports as demand continues to slow.

Meanwhile the US government report showed gasoline inventories fell by 3m barrels more than double than the 1.2m barrels reduction expected.

Expectations that oil cartel OPEC will call for another round of output cuts had little effect. OPEC is scheduled in meeting 15 March in Vienna.

Among precious metals gold rose back above the key $900 an ounce level as the dollar boosted the yellow metal’s appeal as an alternative investment. COMEX gold for April delivery rose $14.80 to settle at $910.70 an ounce.

May silver rose 26 cents to $12.80 an ounce while May copper fell 6 cents to $1.63 a pound.

European Shares

Shares stuck in the red
Market Movers
techMARK 1,096.75 +0.24%
FTSE 100 3,647.16 -1.26%
FTSE 250 5,953.07 -1.22%

There is no shortage of cheery company news Thursday, but weakness in other sectors is offsetting this, keeping the leading share index firmly in the red.

Inmarsat, the satellite communications group, now leads the risers after a strong fourth quarter performance. Revenue grew 20.4% to $160.6m from $133.4m in the corresponding period of 2007, taking full-year revenue to $996.7m, up from $576.5m in 2007.

Standard Life is going well after putting in a “solid” performance in 2008, raising operating profit before tax by a better than expected 6%. Operating profit for the year on a European Embedded Value basis was up to £933m from £881m the year before, but a drop in total return on embedded value to 10.9% from 11.5% in 2007 came after a provision for customer payments to the Pension Sterling Fund.

Supermarket chain Wm. Morrison saw pre-tax profits rise 7% and hiked its dividend by 21% as its strategy of expansion pushed revenue higher and improved margins. The group also said the capital originally earmarked for share buy-backs in the 2009/10 financial year should be retained for future investment opportunities.

In mining, Vedanta Resources, Antofagasta, Xstrata and BHP Billiton are the early pace setters amongst the fallers.

Aviva is down nearly 15% after Citigroup raised concerns it may have to recapitalise. Fellow insurer Prudential is also lower. Thomas Cook leads travel stocks down after the head of its German business said late bookings will be needed if it is to meet summer sales targets.

AMEC hailed another year of record performance as the engineer and project management firm’s 2008 results came in ahead of management expectations. Reported profit before tax, which includes a £109m profit on business disposals and closures, doubled to £306.6m from £151.6m. Revenue rose to £2,606.4m from £2,356.2m the year before.

Argos and Homebase owner Home Retail continued to see like-for-like (LFL) sales fall at both companies during the last eight weeks of its financial year, although the catalogue business did better than feared. LFL sales fell 1.6% at Argos in the eight weeks ended 28 February, but had tumbled 7.5% in the 18 weeks to January. Homebase’s LFL sales dropped 10.2%.

Simon Henry will be the new chief financial officer at Royal Dutch Shell. He will move up from his current role as Executive Vice President Finance in Shell International Exploration on 1 May to replace Peter Voser, who will be the new chief executive as of 1 July.

Oil producer Venture Production said Jon Murphy, chief operating officer, has given notice to step down from his role in May.

Funeral services provider Dignity saw profits rise 17% and said all three of its businesses are continuing to perform well in the first quarter of 2009. Pre-tax profit for the year rose to £35.4m from £30.2m previously on turnover that increased 10% to £175.8m.

Cinema chain Cineworld said annual pre-tax profit more than doubled as cinema goers flocked to see films such as Mamma Mia despite the weak consumer climate. Pre-tax profit came in better than expected at £27.6m for the 52 weeks ended 25 December 2008 from £12.4m the year before.

Newspapers and magazines wholesaler Smiths News has agreed new five year contracts with magazine distributors Frontline and Seymour worth an extra £84m in revenue each year.

Engineer Fenner expects to report an underlying operating profit for the first half approximately 10% below the same period last year due to lower industrial volumes.

Mixed phase catalyst technology firm Catalytic Solutions propelled forward after it won a $9m contract with a North American contracting organisation.

Asia Markets

Indian market rallies after 2-day break

Thursday, the Indian market bounced back sharply in line with the rally in the other global markets in the past two days following some positive comments from the chief executive of Citigroup. Nevertheless, the market pared some of its gains in the last hour amid a weak trend in the other Asian markets and the European markets. The Indian market was shut for trading on Tuesday and Wednesday on account of festival holidays.

In economic news, the inflation rate rose 2.43% in the 12 months to February 28 compared to a rise of 3.03% a week earlier and 6.21% during the corresponding week last year. On the other hand, the index of industrial production contracted 0.5 percent in January as against the revised 0.6 percent contraction in the previous month.

Both the numbers came in line with market expectations. In fact, the upward revision of the December IIP data from -2.2 percent to -0.6 percent raised hopes that the worst phase is over. Analysts now look forward to some improvement in the February and March IIP numbers.

The BSE Sensex opened higher at 8,275 and rose to a high of 8,440 before finishing the day at 8,344, up 183 points or 2.25%. Meanwhile, the S&P CNX Nifty rallied 44 points or 1.72% to 2,617.

The broad-based BSE 500 index moved up 1.75%, while the small-cap and the mid-cap indexes rose a modest 0.40% each. On the BSE, the market breadth was slightly negative, with decliners outnumbering advancers by 1262 to 1162.

Stocks of auto, banking, oil/gas, metal and IT companies showed sharp gains, while select consumer durable stocks such as Blue Star, Rajesh Exports, Videocon Industries and Titan Industries closed in negative territory.

Among the top gainers, ICICI Bank surged up 8.10%, Sterlite Industries jumped 7.26%, Tata Motors soared 6.77%, Maruti Suzuki climbed 5.83% and Sun Pharma rallied 4.78%.

Reliance Communication, Reliance Industries, ACC, Hindustan Unilever, Hindalco Industries, Mahindra & Mahindra, BHEL, Wipro, TCS and Infosys were the other prominent gainers.

However, Bharti Airtel, Tata Power, NTPC, DLF and Ranbaxy Laboratories ended in the red.

Raj Television Network jumped 4.26% after it launched 'Raj Musix Kannada', a 24X7 television channel devoted to Kannada music lovers. Voltas moved down 1.06% after the company obtained shareholder approval for transferring its Chemicals Trading Business to DKSH India Pvt Ltd.

Gateway Distriparks rallied 2.56% after Allcargo Global Logistics acquired about 60.95 lakh shares, or nearly 6% stake in the company. Fulford (India) surged up 14.30% on speculation of a possible open offer from Merck & Co Inc.

Bharat Heavy Electricals gained 3.22% after it secured a new order worth Rs.81 crore. After falling over 15% in the past few sessions due to a foreign brokerage downgrade, Hindustan Unilever ended up over 4%.

Nagarjuna Construction closed flat despite bagging three new orders aggregating Rs.263 crore. Similarly, Aurobindo Pharma finished unchanged even as it received a tentative approval for Lopinavir/Ritonavir tablets 100/25 mg and 200/50 mg from the U.S. Food and Drug Administration.

Bharti Airtel plunged 6.37% after the company's CEO and Joint Managing Director Manoj Kumar Kohli sold his entire stake of 70,000 equity shares through open market transactions. Concerns about the likely loss in revenue following a reduction in the termination fee by the Telecom Regulatory Authority of India also weighed on the stock.

At the same time, CDMA operators such as Reliance Communication and Tata Teleservices rose sharply amid expectations that the latest move by TRAI would benefit these companies.

Tata Communications rose 1.65% after it raised $350 mls in the form of debt and bonds. TVS Motor gained 1.55% after its board took a decision to invest Rs.18.50 crore in its subsidiary company Sundaram Auto Components by way of a rights issue.

Tech Mahindra closed flat after it registered its interest in participating in the bidding process for the beleaguered Satyam Computers. Mercator Lines fell 2.73% after it took delivery of its premium Jack-up Rig through its subsidiary in Singapore.

ORG Informatics was locked in the 20% upper circuit limit after it bagged a new order worth Rs.19.70 crore from the IT Department of Meghalaya.

Reliance topped the traded value with a turnover of Rs.223.53 crore followed by ICICI Bank, Satyam, Bharti Airtel and Reliance Capital. Satyam topped the traded volume with trades of around 3.76 crore shares followed by IDFC, Rolta, ICICI Bank and Cals Refineries.

Canadian Market

TSX Rises Above 8,000 With Second Straight Surge

Bay Street stocks finished in positive territory again Wednesday, led by a strong performance from the gold sector. The gains added to a sharp surge in yesterday's session.

The S&P/TSX Composite Index added 130.61 points or 1.65% to 8,011.02. This marks the highest close for the index in the month of March.

Gold stocks soared 6% and materials gained 5% as the precious metal closed higher for just the third time in 13 sessions.

Agnico-Eagles Mines jumped 7.3%, Kinross surged 7% and Goldcorp added 5.9%. April gold jumped to $910.70 an ounce, up $14.80 on the session. The metal reached as high as $913.80 for the session.

Mining stocks closed up 3.1%, led by a 12.5% surge for Teck Cominco. Technology stocks are up 2.2%. Research on Motion is 1.8% up as it has announced BlackBerry App World, an online applications store.

Also on Wednesday afternoon, Certicom Corp. said that independent firm RiskMetrics Group recommended accept Research In Motion's offer to acquire all of the company's common shares for C$3.00 per share in cash.

Financials closed a choppy session with a 2.2% gain. National Bank added 3.5%, Toronto-Dominion jumped 3.3% and CIBC closed up 2%.

In corporate news Bombardier Aerospace rose 4.3%. The company said that Deutsche Lufthansa has signed a firm purchase agreement for 30 CSeries model CS100 single-aisle aircraft. Industrials are up 1.5%.

Travel operator Transat has dropped 9.9% after the company reported a first quarter net loss of C$29.4 mln or C$0.90 per share, compared to a net loss of C$7.9 mln on or C$0.23 per share in the year ago quarter. Transat also said it was suspending its quarterly dividend

Sirit surged 23.1% after the company announced that its fourth quarter net income was C$2.12 mln, compared to a net loss of C$835,000 in the year ago quarter.

Bicycle company Dorel Industries rallied 10% after the company reported reported net income for the fourth quarter of US$19.2 mln or US$0.57 per share, down from US$22.3 mln or US$0.72 per share in the year-ago quarter.

On the economic front, new home prices decreased 0.6% between December and January, a slightly faster pace than the 0.1% decline observed the previous month. This resulted in a New Housing Price Index of 156.4.

Speaking to reporters in Ottawa, said Canada has the best economic fundamentals of the Group of Seven member countries.

ADVFN World Daily Markets Bulletin - Mar 11, 2009

US Stocks at a Glance

Nasdaq Jumps To A New High For The Session

Stocks are seeing considerable strength in mid-morning trading on Wednesday, extending the strong upward move that was seen in the previous session. The continued strength comes as traders continue to go bargain hunting despite a lack of significant news.

Traders continue to react to positive comments from Citigroup CEO Vikram Pandit, who said yesterday that the company is profitable through the first two months of 2009 and is having its best quarter-to-date performance since the third quarter of 2007.

However, some analysts have suggested that the recent strength in the markets is due in large part to short covering, and it remains to be seen if the markets have found a bottom or are only experiencing a momentary bounce before heading back to the downside.

On the economic front, the Mortgage Bankers Association revealed that its market index of mortgage application volume jumped 11.3 percent on a seasonally adjusted basis for the week of March 6th, following a few weeks of decline.

In recent trading, the tech-heavy Nasdaq has jumped to a new high for the session, while the Dow and the S&P 500 are holding onto strong gains. The Dow is currently up 64.20 at 6,990.69, the Nasdaq is up 26.39 at 1,384.67 and the S&P 500 is up 11.07 at 730.67.

Forex

Dollar dips on rising risk appetite

The dollar came under pressure Tuesday as US stocks staged an impressive rally after comments from Fed chairman Ben Bernanke.

"I think there is a good chance the recession will end later this year and 2010 will be a period of growth," Bernanke said.

However he warned, “Until we stabilise the financial system, a sustainable economic recovery will remain out of reach."

The dollar index, which measures the currency against six others, fell to 88.627 from 89.177 on Monday in late US trading.

An upbeat internal memo from Citigroup boss Vikram Pandit also boosted market confidence and increased risk appetite. Pandit said the bank was profitable in the first two months of 2009.

The euro rose to $1.2679 from $1.2602 late Monday although analysts said the euro’s advance was limited by ongoing concern about the European banking system’s exposure to fragile emerging European banks.

The euro rose to a fresh 5 week high against sterling amid further concern about the UK outlook. Data out Tuesday showed manufacturing in the UK suffered its biggest decline in decades while separate figures from the Office for National Statistics showed the recession is getting worse and its impact shows no sign of lessening in the near-term.

The greenback was down slightly against the yen to 98.70 yen from 98.79 yen late Monday although the Japanese currency remains under pressure on concern about the country’s economic outlook following a string of gloomy economic data.

Commodities

Oil settles under $46, gold under $900

US crude oil fell on Tuesday after the US government lowered its forecast for global demand in 2009 and said prices are expected to fall further.

US light crude oil for April delivery fell $1.36 to settle at $45.71 a barrel on the New York Mercantile Exchange.

The monthly report by the Energy Information Administration said oil is expected to average around $42 a barrel in 2009, down from a previous forecast of $43.

The statistical group also cut its forecast for prices next year to $53 from $55. The report also lowered its forecast for global consumption in 2009 by around 430,000 bpd to 84.27m.

The EIA has reduced its monthly estimates eleven times in the last year and concern about this demand deterioration has brought oil prices over $100 lower from record highs seen in July 2008.

Otherwise market onlookers will be keeping an eye on Wednesday’s weekly inventory data from the EIA.
Gold slipped below $900 an ounce on Tuesday as a 400-point rally on Wall Street reduced its appeal as an alternative investment.

COMEX gold for April delivery fell $22.10 to settle at $895.90 an ounce the New York Mercantile Exchange. Copper for May rose 5 cents to $1.68 while silver for the same month lost 40 cents to $12.54 an ounce.

European Shares

European markets expected to open firm

The major markets across Europe are expected to open slightly higher on Wednesday primarily led by financial stocks following positive comments from Citibank's CEO Vikram Pandit that helped the U.S markets to rally and the Asian markets to follow suit in Asian trading.

However, economic data from the China revealing that exports declined sharply by 25% for the second month this year in February following an 18% drop in January might act as a dampener, triggering further concerns regarding the outlook for the global economy as a whole. The Chinese Shanghai Composite Index is reacting negatively to the economic data which overshadowed the buoyancy across the financial sector in major markets.

The Future value of DJ Euro Stoxx 50 point is up 3 points, while the future indices of CAC 40 10 Euro and Dax are up 7.50 points and 0.50 points respectively.

On Tuesday, the FTSEurofirst 300 index of pan-European blue chips closed 5.11% higher at 690.89 points, while the narrower DJ Stoxx 50 index rose 5.44% to 1,703 points.

Around Europe, the U.K.'s FTSE 100 index rose 4.88% to 3,715, while France's CAC 40 index climbed 5.73% to 2,664 and Germany's DAX index surged up 5.28% to 3,887.

On the economic front, the UK trade balance and German factory orders are expected to dominate the news flow later in the day.

Among the individual stocks, Deutsche Lufthansa is expected to react after Bombardier Aerospace said that Deutsche Lufthansa AG has signed a firm purchase agreement for 30 CSeries model CS100 single-aisle aircraft. Based on list price, the contract value for the 30 CS100 aircraft is approximately US$1.53 billion.

Asia Markets

Asian markets advance on hopes of recovery in banking sector

Wednesday, the major markets across Asia-Pacific region advanced on hopes that the banking sector across the world will recover earlier than expected after the Citibank CEO Vikram Pandit said on Tuesday that the bank made profit in the first two months of 2009, and is poised to report better results for the first quarter. Fed Chairman Ben Bernanke's assertion that large banks would not be allowed to fail also lifted the sentiment.

In the Asian session Wednesday, crude was up modestly in electronic trading. Oil closed Tuesday's session down $1.36 at $45.71 a barrel on the New York Mercantile Exchange, after hitting an intra-day low of $45.33 and a high of $48.32 after U.S. Energy Information Administration or EIA, in its short-term outlook, lowered forecast for global energy demand for 2009 by 430,000 barrels to 84.27 million barrels per day.

Banking stocks led the gains across the markets. Mining stocks also advanced after the commodity prices rose in the London Metal Exchange. While copper prices rose 3%, nickel and zinc prices advanced 3.3% and 2.7% respectively. The positive sentiment in the market lifted almost all the stocks, which were in an oversold state following huge sell-offs in the recent past. However, the strength of the rally may not sustain long as a recovery and bottom is nowhere in sight.

Mixed economic data from China also raised fresh concerns. While Fixed Asset Investment rose sharply, aided partially by the stimulus plans, export from the country declined sharply by more than 25% during February following an 18% drop in January, raising doubts whether the growth story of the Chinese economy will fizzle out or could not be sustainable. The Chinese Shanghai composite index discounted the weak economic data and closed in negative, bucking the uptrend in the rest of the major markets in the region.

The markets in India were shut for a public holiday. In Japan, the benchmark Nikkei 225 Index surged up 321 points or 4.6%, to close at 7,376 in Tokyo, while the broader Topix index added 19 points, or 2.7%, to 722.

On the economic front, the Bank of Japan said on Wednesday that Japan's domestic corporate goods price index was down 0.4% in February compared to the previous month, posting an index score of 105.0. That was better than analyst expectations that had called for a 0.6% fall on month after the 1.0% decline in January. On an annual basis, the CGPI eased 1.1% slightly better than forecasts that had predicted a decline of 1.2% after the 0.2% fall in the previous month.

Meanwhile, the Cabinet Office said that core machinery orders in Japan were down 3.2% in January compared to the previous month, marking the fourth consecutive month of decline. That came in higher than analyst expectations for a 4.8% monthly decline following the 1.7% drop in December.

Banking stocks led the rally in the market. Mitsubishi UFJ advanced 5.57%, Sumitomo Mitsui gained 4.83% and Mizuho Financial rose 0.57%.

Resona said it will retire about 160 billion yen in preferred stock owned by the government ahead of the April 1 deadline for converting the holdings into common stock. Also, the company's market capitalization surpassed that of Mizuho Financial on Tuesday for the first time. Following the news, the stock slid 4.75%.

Toshiba shares surged up 9.50% after a business daily reported that the company will likely secure an operating profit of about 100 billion yen for the year ending March 2010, rebounding from the 280 billion yen operating loss expected this fiscal year.

Among exporters, Canon gained 6.56%, Sharp rose 5.33% and Sony advanced 4.53%. Meanwhile, automaker Honda surged 6.25% andToyota added 2.11%.

In the oil sector, Inpex and Showa Shell advanced about 4% each while Nippon Oil gained 4.30%. Trading house Mitsubishi Corp. surged up 2.96%, Sumitomo Corp gained 2.24% and Itochu advanced 0.72%.

Seiko Epson is up 6% on news that it plans to consolidate three production bases of LCD panel subsidiary Epson Imaging Devices into one by September and stop production at a chip making plant as early as 2011 as part of restructuring.

In Australia, the benchmark S&P/ASX200 Index gained 60 points, or 1.88%, to close at 3244, while the broader All Ordinaries Index advanced 56 points or 1.78% to close at 3199. The major averages opened higher and rose further in early trading before moving sideways for the rest of the session.

On the economic front, the Westpac/Melbourne Institute survey of consumer sentiment index for March showed that consumer sentiment in Australia declined slightly in March by 0.2% to 85.6 points. Readings below 100 indicate pessimists outnumbering optimists. Consumers' feelings about the economy over the next five years, however, jumped 15.2%.

Banks and mining stocks led the rally in the market. Commonwealth Bank of Australia gained 2.99% and ANZ Banking Group advanced 3.22%. Westpac rose 2.55% and investment bank Macquarie Group closed higher by 4.43%. National Australia Bank managed to close in the green, with a modest 0.12% gain after showing weakness earlier in the day.

Mining stocks advanced after a measure of six metals traded in the London Metals Exchange rose on Tuesday. While Copper gained 3%, zinc and nickel advanced 3.3% and 2.7% respectively. BHP Billiton advanced more than 4% while rival Rio Tinto gained about 3%.

Retail stocks also posted gains. David Jones moved up 4.59%. Woolworths gained 1.43% and Wesfarmers advanced 0.87%.

Mixed sentiment was witnessed among energy stocks, with Oil Search advancing, while Santos and Woodside Petroleum retreated slightly from their previous closes. Oil Search gained 3.24%, whereas Santos and Woodside shed 2.75% and 0.27%, respectively.

Gold miners also closed on a mixed note after gold closed lower on Tuesday. Lihir gold shed more than 6% while Sino Gold and New crest mining gained 4.12% and 0.52% respectively.

In Hong Kong, the benchmark Hang Seng Index gained 2% or 237 points to close at 11,931. Financial stocks led the gains. However, profit taking at higher levels and weaker economic data from mainland China dampened sentiment and limited the gains.

HSBC Holdings, which surged past HK$42 in early trading, ended the day with a gain of 2.25%, while Hang Seng Bank advanced 5.75%. Most stocks, which rose in early trading, gave back most of their gains post-release of economic data in mainland China.

In Seoul, the bench-mark KOSPI index advanced 3.23% or 35 points to close at 1,128. Banks, commodities and exporters led the gains. The sharp appreciation in the local currency against the U.S greenback and foreign buying spree also lifted the market sentiment.

Shipbuilding stocks advanced, with Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding posting gains in excess of 3% each.

Financial stocks also gained, led by KB Financial Group, the holding firm of Kookmin Bank, up more than 7%, while Woori Finance and Shinhan Group advanced 3.4% and 2% respectively.

In the automobile sector, Kia Motors gained more than 6% and Ssangyang Motor and Hyundai motor were up more than 2%, each.

Oil Stocks SK Holdings and S Oil also advanced, with gains of 2.5% and 1.7%, respectively.

Among the other markets, China's Shanghai Index slipped about 1% or 19 points to 2139, while Malaysia's KLSE Composite Index ended down 5 points to 855. Singapore's Strait Times Index advanced 1.33% to 1505, while Taiwan's Weighed Index gained about 1.9% or 89 points to 4760.

Canadian Market

Bay Street in Better mood After Dramatic Rebound

Canadian stocks will look to extend their strong gains from the previous session Wednesday morning after yesterday's positive news from Citigroup sparked a major relief rally.

On Tuesday, the S&P/TSX Composite Index jumped 313.47 points or 4.14% to finish at 7,880.41. The index had posted its lowest close since 2003 on Monday.

US stocks saw their biggest daily gain of 2009 on Tuesday, as traders went bargain hunting following some positive comments from the chief executive of Citigroup.

In a letter to company employees, Citigroup CEO Vikram Pandit said that the company is profitable through the first two months of 2009 and is having its best quarter-to-date performance since the third quarter of 2007. He added that the company is confident about its capital strength.

On the corporate front Wednesday, travel operator Transat A.T. Inc. reported a first quarter net loss of C$29.4 million or C$0.90 per share, compared to a net loss of C$7.9 million or C$0.23 per share in the year ago quarter. Transat also said it was suspending its quarterly dividend.

Canadian biopharmaceutical company AEterna Zentaris Inc. reported a wider than expected net loss in its fourth quarter. The results were hurt by lower quarter-over-quarter royalties related to the license agreement with Merck Serono.

Allen-Vanguard Corp. said it secured C$10.25 million contract addition from General Dynamics Armament and Technical Products for field service representatives in support of military operations in Iraq.

Bombardier Aerospace said that Deutsche Lufthansa AG has signed a firm purchase agreement for 30 CSeries model CS100 single-aisle aircraft. Based on list price, the contract value for the 30 CS100 aircraft is approximately US$1.53 billion.

On the economic front, Canadian new home prices decreased 0.6% between December and January, a slightly faster pace than the 0.1% decline observed the previous month. This resulted in a New Housing Price Index of 156.4.

ADVFN World Daily Markets Bulletin - Mar 10, 2009

US Stocks at a Glance

Major Averages Hovering Firmly In Positive Territory

Stocks are seeing substantial strength during mid-morning trading on Tuesday as investors react positively to comments from the CEO of Citigroup and mull over remarks from Fed Chairman Ben Bernanke as well as the Commerce Department's monthly report on wholesale inventories.

In a letter to company employees, Citigroup CEO Vikram Pandit said that the company is profitable through the first two months of 2009 and is having its best quarter-to-date performance since the third quarter of 2007.

Pandit also said that he is disappointed with Citigroup's current stock price and the broad-based misperceptions about company and its financial position. Pandit stated that he doesn't believe it reflects the strengths of Citi.

On the economic front, the Commerce Department released its monthly report on wholesale inventories, showing that inventories fell 0.7 percent in January following a revised 1.5 percent decrease in December. Economists had expected inventories to fall 1.0 percent compared to the 1.4 percent decrease originally reported for the previous month.

The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is currently up 250.49 at 6,797.54, the Nasdaq is up 60.15 at 1,328.79 and the S&P 500 is up 28.69 at 705.22.

Casey's General Stores jumped to a 2 1/2 month high on Tuesday after the convenience store operator said its third quarter earnings rose from last year. Shares rallied to $23.40, up $4.52 on the session.

The company reported net income for the third quarter of $14.0 million or $0.28 per share, compared to $13.0 million or $0.26 per share for the year-ago quarter.

Forex

Dollar Slightly Weaker versus Other Majors Tuesday morning

The dollar was slightly weaker versus other major currencies Tuesday morning in New York as the mood improved on Wall Street, fueling a bit of risk appetite.

Despite evidence that the economic situation in the Eurozone continues to worsen, traders drove up the value of the euro on hopes that financials may lead a turnaround for equities. Higher-yielding currencies such as the euro have fallen sharply over the last few months, with traders looking to safer, low-yielders like the dollar and yen as a safer haven.

Finance ministers from the 16 nations sharing the euro rejected a U.S. call for additional economic stimulus measures to help combat the global crisis, media reports said Tuesday.

On the economic front in the US Tuesday, the Commerce Department is due to release its wholesale inventories report at 10 AM ET. Economists expect wholesale inventories at the end of January to show a 1% decline.

Prior to that, Fed Chairman Ben Bernanke is scheduled to speak on reforming the financial system to the Council on Foreign Relations in Washington at 8:30 am ET.

The dollar continued its run of choppy trading versus the euro this morning, falling to 1.2725 from an overnight level near 1.2670. The pair has been bouncing around between 1.2400 and 1.2800 for the past few weeks, with the dollar unable to break above its nearly 3-year high of 1.2328, set last fall.

Tuesday, data released by the French customs office showed that the country's trade deficit swelled to EUR 4.55 billion in January from a revised EUR 2.95 billion in December. Economists had forecast a deficit of EUR 3 billion. Initially, the December trade deficit was reported as EUR 2.45 billion.

The dollar drifted very slightly lower versus the sterling Tuesday morning, slipping to 1.3875 from yesterday's 6-week high of 1.3741. A move above 1.3501 would take the dollar to its highest level in 23 years.

Housing sales in the UK fell to the lowest level in at least 31 years, a recent study by the Royal Institution of Chartered Surveyors, or RICS revealed Tuesday.

The dollar also lost a bit of ground versus the yen after once again failing to break through the elusive 100 mark. The buck fetched 98.30 approaching mid-morning, having replaced the yen as the world's premier safe haven currency over the past few weeks. Earlier this year, the dollar hit a 13-year low of 87.08 versus the yen, but has risen sharply amid evidence the global recession has crippled the Japanese economy.

Tuesday, a report from Japan's Economic and Social Research Institute showed that the leading index fell to 77.1 in January from 79.4 in December. Economists expected the index to come in at 77.4. The leading index has been on a declining trend since August 2008.

European Shares

UK Industrial, Manufacturing Output Show Worst Declines Since 1981

British industrial as well as manufacturing production declined in January at the fastest pace since 1981 signaling that the economy entered a deeper recession at the start of 2009, official data showed Tuesday.

Industrial output slid 2.6% month-on-month in January, the Office for National Statistics or ONS reported, double the decline expected by economists. Production was forecast to drop 1.2% in January after falling 1.5% in December.

Mining and quarrying output decreased 3% in January. Meanwhile, energy supply output remained flat on the month with a fall in electricity supply being offset by a rise in the gas and water supply.

In January, annual decrease in industrial production was 11.4% compared to the 9.3% drop in the previous month. This was the biggest annual decline since January 1981. Economists were looking for a 9.9% fall.

In the three months to January, industrial output decreased 5.6% from the previous three months, taking the annual fall to 9.6%, the ONS said.

Manufacturing production dropped 2.9% on a monthly basis in January, severe than December's revised 1.9% decline. Economists had expected only a 1.4% decrease. Output declined in nine of the 13 sub-sectors and increased in four sub-sectors during the latest month.

The most significant decreases in output were reported in transport equipment industries with a 10% fall, followed by a 6.1% drop in electrical and optical equipment industries and a 7% slump in the machinery and equipment industries.

From January 2008, output of the manufacturing industries was down 12.8%, larger than the 11.7% decline expected by economists.

Commenting on the January manufacturing figures, the British Chambers of Commerce said the bigger-than-expected fall in manufacturing output signals that the sector failed to benefit from the sharp deterioration in sterling. David Kern, Chief Economist at BCC said, "The critical priority is to ensure that the vital skills base within manufacturing is not lost during this recession."

Analyst at Commerzbank, Peter Dixon said in a note that the industrial sector will subtract 0.8 percentage points from the first quarter GDP growth even if industrial production remain flat in February and March. An earlier survey by the Confederation of British Industry suggested no rebound soon in manufacturing, while export orders continue to collapse on global slowdown.

Considering these factors, recent weakening of sterling will have little effect in stimulating the industrial sector and the economist sees further decline in the months to come as manufacturers reduce production on the back of rising inventories of unsold goods.

The UK economy shrank at the fastest pace since the second quarter of 1980 and entered its first recession since 1991. The economy contracted 1.5% sequentially in the fourth quarter of 2008, following a 0.7% fall in the third quarter.

Asia Markets

Most Asian Markets Advance; Nikkei Ends Down Off Lows

The major markets across the Asia-Pacific region, excluding Japan, advanced on Tuesday, led by financials and commodities despite the weaker closing of the U.S markets overnight.

Crude oil rallied sharply on Monday amid expectations the Organization of Petroleum Exporting Countries, or OPEC, will lower output again at its next meeting. Light sweet crude for April delivery closed at a 2-month closing high of $47.07 on the New York Mercantile Exchange, up $1.55 from the previous session. In the Asian session Tuesday, crude was up $0.26 at $47.33 a barrel in electronic trading.

HSBC Holdings, listed in the Hong Kong Stock Exchange, triggered the positive trend, rising more than 14% during the trading session after declining by over 24% on Monday. Higher oil prices and speculation that the Organization of Petroleum Exporting Countries will further reduce production levels at the meeting in Vienna helped oil stocks post gains.

Oversold conditions in many stocks across the region also helped the indices to rally; however, the markets are unlikely to sustain the momentum for want of additional data that could infuse confidence among the investors.

The stock market in Australia ended in positive territory on Tuesday, led by banks and oil stocks.

The benchmark S&P/ASX 200 Index gained 0.95% or 30 points to close at 3,184.50, while the broader All Ordinaries Index gained 0.69% or 21.50 points to close at 3143.20. However, volume was relatively thin, as most investors preferred to adopt a wait-and-watch approach amid a gloomy outlook for the global economy.

The Australian stocks, which opened weaker, staged a recovery in the afternoon, propelled by bank stocks. National Australia Bank gained 1.56%, and Commonwealth Bank surged up more than 4%. Westpac Banking gained 3.46%, and ANZ Bank advanced 1.68%.

Among energy stocks, Woodside Petroleum gained 3.29% and Santos was up 4%. Mining companies BHP Billiton and Rio Tinto also ended in the green, with gains of 0.55% and 1.68% respectively.

Mixed trading was witnessed among media stocks. While Consolidated Media gained 0.26%, Fairfax and News Corp. ended in negative territory.

Gold-related stocks declined following a drop in the price of bullion in the local market. The price of Gold in Sydney declined US$22.60 an ounce to US$914.40 per ounce, compared to its previous close at US$937.60.

Newcrest Mining as well as Newmont Mining shed 2% each, while Lihir Gold slipped 3.07%.

The stock market in Tokyo declined for the third consecutive day on concerns about the global economy. Concerns about rising oil prices and a drop in global demand impacting corporate profits outweighed the positive sentiment generated by a recovery in financial stocks, leading the indices to close in the red amid volatile trading.

The benchmark Nikkei 225 index closed at a fresh 26-year low of 7054.38, down 31.05 points or 0.4%, while the broader TOPIX Index declined 1% or 7.03 points to close at 703.50.

Utility companies and drug makers were the major losers in the market. However, banking stocks, real estate firms and insurance companies advanced.

Drug maker Astellas Pharma shed 5.30% and Takeda Pharmaceutical extended sharp losses from Monday by another 3.92% amid worries about the companies' competitiveness following Merck's deal to acquire Schering-Plough.

Utility companies such as Tokyo Electric and Tokyo Gas firm declined 3.6% each on concerns that rising oil prices might impact the profits.

Banks gained, helping to partially offset the slide in the markets and helped the benchmark Index close much above the psychological 7,000-mark. Mitsubishi UFJ Financial gained 3.67% and Mizuho Financial advanced 2.34% during the trading session. Sumitomo Mitsui Financial was up 1.7%.

The Hang Seng Index in Hong Kong gained 3.08%, or 349.47 points, to close at 11,694.05.

HSBC Holdings led the rally with a gain of about 14%. The stock declined sharply by more than 20% on Monday on concerns about its ability to raise funds in the market and weaker earnings results. News that the Hong Kong's Securities and Trading Commission will investigate into the sharp drop on Monday helped the stock to open stronger and rally in the session.

Hang Seng Bank also advanced during the trading session. CNOOC gained more than 6% on higher oil prices.

The benchmark KOSPI index in South Korea gained 2% to close at 1092.20, led by financial stocks. Woori Finance gained as much as 15% while other financial stocks such as KB Financial, the holding firm of Kookmin Bank, and Shinhan Financial also advanced.

The markets in India and Malaysia are closed for public holiday. Among other markets in the region, China' Shanghai Composite Index gained 1.88% or 39.82 points to close at 2,158.57; Singapore's Strait Times Index was up 1.98% or 28.80 points to close at 1,485.75; and Taiwan's Index advanced about 1% or 43 points to close at 4671.02.

Canadian Market

Bay Street Waking Up in Better Mood Tuesday

Canadian stocks will look to stop the bleeding on Tuesday, and early signals are somewhat positive after Toronto's main index closed the previous session at a new five year closing low.

The mood was slightly better this morning, as most Asian markets strengthened overnight and US stock futures rose sharply on speculation that the brutal recent sell-off may have been overdone.

Still, a steady drumbeat of dismal economic news is likely to give investors little reason to dive back into equities with both feet.

Energy stocks may be in play, with the price of crude continuing its charge back toward $50 a barrel. Crude prices rose to $48 in early dealing.

Financials may also come into focus after Citigroup CEO Vikram Pandit reportedly said company is profitable through the first two months of 2009 and having best quarter-to-date performance since the third quarter of 2007.

In corporate news from Canada, Iamgold, operator of mines in Africa and Canada announced it will sell about C$275 million in new shares.

Methanol maker Methanex revealed that CEO Bruce Aitken plans to buy as many as 40,000 additional common shares of the company.

Tuesday, TeraGo Inc. a wireless broadband service provider, reported a wider net loss for the fourth-quarter, reflecting increased future income tax expense and slightly lower profit margin. However, the company's revenues grew 22%.

Across the border, Dow Chemical Co. announced a settlement agreement with Rohm and Haas (ROH) to close the $15.4 billion buyout on substantially altered financial terms by April 1. The acquisition creates the world's leading specialty chemicals and advanced materials company.

ADVFN World Daily Markets Bulletin - Mar 9, 2009

US Stocks at a Glance

US stocks are down in early deals despite the multi-billion dollar merger between drug makers Merck and Schering-Plough.
Merck has agreed to pay $41.1bn (£29.7bn) for rival Schering-Plough in a deal that will create one of the world’s largest drug companies.

The US firms are both big in the cholesterol drugs market, responsible for Zetia and Vytorin, but sales are falling and a merger will slash costs. Sales of the drugs slumped 26% in the fourth quarter after a study raised doubts that they were any better than cheaper alternatives, but annual sales are still worth about $4.5bn.

Across the markets, the Dow Jones has started down 37 points to 6589 with the Nasdaq falling 2 points and the S&P 500 is down 3.

In other company news, newspaper publisher McClatchy said it plans to eliminate 1,600 jobs, around 15% of its workforce, and lower salaries as it tries to contend with the tough advertising market.

Fast food chain McDonald's cautioned Monday that the stronger dollar and commodity costs will hit first quarter results. Sales are expected to be down by at least $600m and earnings hurt by 7 cents to 9 cents per share if foreign-currency rates stay at current levels.

Meanwhile, Capital One Financial will slash its dividend 87% to 5 cents to help preserve capital.

Forex

The dollar was broadly weaker against major currencies on Friday as investors gave a mixed reaction to Friday’s big job numbers.

Employers slashed 651,000 jobs in February, down from a revised loss of 655,000 jobs in January. Last months figure was not as bad as some analysts had feared but the unemployment rate, up from 7.6% to 8.1%, is now the highest level for 25 years.

The dollar index, which measures the currency against six others, fell to 88.850 from 89.046 in late US trading Thursday.

Sterling was under pressure after the Bank of England halved interest rates to a historic low of 0.5% and announced a £75bn plan to boost the supply of money to get the economy moving again. Monetary Policy Committee members voted to undertake a programme of asset purchases of £75bn, broadly in line with expectations, financed by the issuance of central bank reserves.

Meanwhile, the European Central Bank cut its benchmark rate to 1.5%, the lowest level since it introduced the single euro rates in 1999. ECB president Jean-Claude Trichet said interest rates could be reduced again.

The euro rose to $1.2641 from $1.2538 late Thursday.

European Shares

European midday: Shares still down

LONDON - Banks are still leading Europe’s top stocks lower in midday trade after the UK government took control of Lloyds Banking Group.

The government has taken a 65% controlling stake in Lloyds, which could rise to 77%, for underwriting £260m of the bank's toxic assets.

Chairman Sir Victor Blank and chief executive Eric Daniels will discuss the deal with shareholders on Monday as it emerged that 83% of the bad loans to be guaranteed by the government were on the books of HBOS.

HSBC, meanwhile, has been in the sights of hedge funds in Asia overnight, with reports of a number of large short positions being taken prior to the stock going ex-rights this week.

On the Continent, Swiss Re has appointed Walter B. Kielholz, the current chairman of Credit Suisse, as the reinsurer’s new chairman. Kielholz, who was up to now vice chairman of the Swiss firm, replaces Peter Forstmoser who will step down as of 1 May.

Meanwhile, the Icelandic government has taken over Straumur Burdaras, the country’s only remaining listed bank.

The Icelandic Financial Supervisory Authority (FME) said it is has closed the bank for business due to liquidity problems.

Across the markets, the German DAX has dropped 46 points to 3,620, the French CAC is down 41 points at 2,492, while the Swiss market fell 21 points to 4,289.

On the positive side, shares in Deutsche Bank are on the rise after the sector giant told German Daily Handelsblatt that the positive business trend it has experienced in January has continued in February.

CAC 40 - Risers
Dexia € 1.17 +2.18%
Sanofi-Aventis € 40.35 +2.07%
BNP Paribas € 21.84 +0.48%
Essilor International € 26.37 +0.23%
Air France-KLM € 6.38 +0.22%
Lagardere SCA € 23.45 +0.21%
ArcelorMittal SA € 14.37 +0.10%

CAC 40 - Fallers
AXA € 5.85 -6.16%
Societe Generale € 18.78 -5.37%
Schneider Electric € 43.56 -4.19%
Unibail-Rodamco € 86.36 -3.72%
Michelin € 22.99 -3.67%
Vallourec € 54.10 -3.39%
Veolia Environnement € 15.98 -3.27%
Saint Gobain € 18.41 -3.23%
France Telecom € 16.91 -2.96%
Renault € 10.53 -2.72%

Commodities

A weaker dollar gave crude oil prices a boost on Friday while increased expectations that oil cartel OPEC will make additional output cuts later this month added to oil’s momentum.

US light crude oil for April delivery rose $1.91 to settle at $45.52 a barrel on the New York Mercantile Exchange.

Bigger gains however were capped after the release of key US jobs data, which revealed unemployment at its highest level in a quarter of a century.

Oil prices have been drive sharply lower on concern about dwindling demand as the global recession continues. The Labor Department's widely watched payrolls report kept the dollar weak, which boosts the appeal of commodities in that currency.

Among precious metals gold was back in favour at the end of the week after an eight consecutive session losing streak, as jitters about the jobs data prompted a flight to the yellow metals safe haven qualities.

The weaker dollar also gave gold’s appeal a boost. COMEX gold for April delivery settled up $14.90 to settle at $942.70 an ounce.
May silver rose 21 cents to $13.33 while May copper added 4 cents to $1.69.

Top Energy Stories Of The Day

OIL UP ON POTENTIAL OPEC CUT
Oil futures are higher as traders weigh the probabilities of another OPEC production cut against the ever-present worries about the economy. April delivery is up $2.25 or 5% at $47.77/bbl. OPEC meets on Sunday in Vienna.

OPEC SAYS GROUP COMPLIANCE AT 80%-85%
OPEC's Secretary General Abdalla Salem El Badri says the group expects crude demand to drop by as much as 1 million barrels a day in 2009 as compliance to implement agreed cuts hit about 80% to 85%.

TULLOW OIL RAISES $2B DEBT
Tullow Oil says it has raised $2 billion in debt, even though credit markets have tightened for the independent oil sector, and adds new reserves to its large Ghana oil acreage.

US STOCKS BOUNCE HIGHER
U.S. stocks head higher after stuttering in early trading as the market tries to rebound from four straight weeks of losses that pushed major market indexes to 12-year lows. Bank of America leads blue-chip gainers, up 14% while GM gains 10%. GE is up 8% and American Express is ahead 7%.

BNP PARIBAS SHARES OUTPERFORM SECTOR
Shares in BNP Paribas outperform the European financial sector after the French bank reached a revised deal worth 10.4 billion to acquire parts of struggling financial services group Fortis.

POSSIBLE TO HIKE ETHANOL BLEND RATE TO 20%
U.S. Department of Agriculture Secretary Tom Vilsack believes it will be possible that the ethanol blend rate in gasoline could reach as much as 20% in "a couple of years," up from the national 10% level in place now.

PIEDMONT NET DOWN 1.7%; EPS VIEW CUT, DIV RAISED
Piedmont Natural Gas's fiscal first-quarter net income falls 1.7% to $80.9 million, or $1.10 a share, to as the utility's revenue and margins fell amid weakness to secondary markets.

SASOL CUTS INTERIM DIVIDEND
Sasol is looking to conserve cash by reducing its interim dividend, but will maintain the cover ratio for the full year, possibly supporting the payout with a stock award, Chief Executive Pat Davies says.

VENEZUELA OIL MIN TO VISIT CHINA IN MARCH
Venezuela's oil minister and a team from the country's state oil business will visit China later this month, with future crude oil and fuel oil sales high on the agenda. At present, Venezuela is supplying around 300,000 barrels a day of oil to China.

CHINA COPPER IMPORTS LIKELY HIT RECORD HIGH
China's refined copper imports for February likely hit a record high, boosted by rising downstream demand and government stockpiling, analysts and traders say.

CHINA PROMISES $5B FOR RIO TINTO EXPANSION
China is shoring up support for its investment in Rio Tinto by promising to invest up to $5 billion in the mining firm's expansion, a U.K. newspaper reports, without citing sources.

NO LIFELINE GUARANTEE FOR RUSSIAN TYCOONS
A top Kremlin official warns that Russia's debt-burdened tycoons might have to part with their assets amid the deepening global crisis, and says that the government no longer has the resources to bail them out.