Online Stockmarket Trading Update

U.S. Markets

U.S. stock markets closed higher overnight, led by telecoms, financials and the miners.  The weekly jobs report led to confidence that jobs data would continue pointing to a strengthening labour market, with Non-Farms due out Friday. 

All three major indices rose for the session, while the Russell 2000 small-cap index was on track to finish at its highest close of the year, after trading at its highest levels since October 2007.  The performance of the Russell 2000 is surprising given the global uncertainties and the caution around investing in riskier small-cap stocks, as they generally have lower cash reserves and higher volatility in earnings and profits. 

Telcos were again in focus as AT&T’s CEO said he expects to sell-down some of the businesses as the company pursues a $US39 billion buyout of T-Mobile USA from Deutsche Telecom. Other stocks that performed well included:
* Visa and Mastercard, up around 2% as expectations grew that rules limiting debit card swipe fees will be delayed by the Fed.
* BlackRock, the world’s biggest money manager, rose 6.6% and is set to join the S&P 500 index.
* Salesforce.com rose 5.6% after agreeing to buy monitoring firm Radian6 for about $US326 million. 

In economic news the U.S. private-sector payrolls increased by 201,000 jobs in March, just below the expectation, as half the gains came from small businesses. Also, a majority of America’s largest companies are ready to step up hiring this year and more than 90 percent expect sales to improve, a new survey has found. 

There are still crucial reports due this week including the Non-Farm jobs report and manufacturing surveys, also the end-of-quarter.

The Dow closed up 0.6% (or 71 points) at 12,351, while in the broader market the S&P 500 index was up 0.7% (or 9 points) at 1,328 and the tech-heavy Nasdaq ended up 0.7% (or 20 points) at 2,777.

All of the ten company groups that make up the S&P index traded higher, with out-performers including Materials up 1.1%, Consumer Staples up 1.1%, Financials up 0.8%, Energy up 0.7%, and Industrials up 0.4%.

European Markets

European stock markets ended higher overnight, led by gains in the German market.  The Stoxx Europe 600 index rose 0.7%.  The euro rose against the US dollar amid comments from European Central Bank officials suggesting rate hikes as soon as next month. 

European manufacturing and industrial stocks were boosted by news that Japanese manufacturers are starting to resume production. 

In Germany the market outperformed.  German car makers rose around 2% after suffering in recent sessions as a result of worries that component shortages following Japanese earthquake could hurt car production. Industrial conglomerates also performed strongly with Siemens AG and chemicals giant BASF SE up 2%. 

Banks with exposure to weaker European economies were under pressure in the session. In London the FTSE 100 index rose, boosted by mining stocks as metal prices strengthened. The Bank of Ireland plunged 9.3% ahead of the results of the Irish banks’ stress tests, due out tonight.

The FTSE 100 index closed up 0.3% (or 16 points) at 5,948, the German DAX was up 1.8% (or 123 points) at 7,057, while in France the CAC was up 0.9% (or 36 points) at 4,024.

Asian Markets

Asian stock markets traded mostly higher yesterday. 

Japanese stocks jumped as exporters rose due to a weaker yen, after news that some firms will soon restart production at plants affected by the devastating earthquake and tsunami.  However market sentiment remained cautious, as authorities struggled to contain radiation leaks from the damaged Fukushima Daiichi nuclear power facility.  Tokyo Electric Power (Tepco), which owns the Fukushima Daiichi nuclear plant, slumped another 18% during the session, taking losses so far this month to 78%.

The Hang Seng index and the Shanghai Composite both traded higher. China’s is among the best performing markets in the region for the year-to-date.  Real estate and coal stocks gave up some of their recent strong gains. Ag Bank of China shares rose 0.4% after the lender reported a 46% jump in its 2010 net profit, beating estimates.

The South Korean Kospi gained 0.9%, while the Indian Sensex rose 0.9% for a seventh straight session of gains. The Aussie dollar again briefly hit a post-float record high against the US dollar on improved risk appetite.  

In China the SSE Composite closed down -0.1% (or -2 points) at 2,955, while in Hong Kong the Hang Seng Index was up 1.7% (or 391 points) at 23,451 and in Japan the Nikkei 225 Index was up 2.6% (or 250 points) at 9,708.

Commodities

The Dollar Index was lower at 76.01 on a higher Euro, while the Australian Dollar last traded above parity at 102.68. Commodities were generally higher.

For the session the Benchmark crude NYMEX for April delivery was down -0.4% (or $US0.45) to settle at $US104.34.  Copper prices are around 2-year highs, with copper for April delivery down -1.7% (or -7.3 cents) at $US4.2545.  April gold was up 0.5% (or $US6.40) at $US1,422.60.

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