Global Market Overview 04/06/2011

U.S. Markets

U.S. stocks ended mixed on Tuesday as weaker-than-expected ISM Services PMI report and hawkish Fed meeting minutes weighed on the sentiment.

The Dow Jones Industrial average declined 6.13 points, or 0.05 percent, to end at 12,393.90. The S&P 500 fell 0.24 points, 0.02 percent, to close at 1,332.63. The Nasdaq Composite gained 0.02 percent.

The Institute for Supply Management said the services sector expanded in March for the 16th straight month, but its index of non-manufacturing activity declined to 57.3 from 59.7 in the previous month, while analysts expected a reading of 59.5.

A moderate sell-off occurred in the afternoon after the Federal Reserve released minutes of its March 15 meeting. It didn’t contain major surprises and confirmed that while some hawks on the rate policy committee want to possibly cut short the Fed’s program of quantitative easing, the majority disagree and see no reason to adjust the size.

On the corporate front, National Semiconductor Corp. (NYSE:NSM) shares climbed 71 percent and Texas Instruments (NYSE:TXN) gained 1.7 percent after Texas Instruments said it agreed to buy NSM for $6.5 billion, or $25 per share, a deal that combines two industry leaders in analog semiconductors, each with unique strengths in delivering products to improve performance and efficiency and convert real-world signals in electronic systems.

Apple Inc. (NASDAQ:AAPL) stock moved down 0.67 percent to $338.89. The company's weighting in the Nasdaq-100 Index was cut as it had its first major reshuffle since 1998 to better reflect companies’ market value. Apple’s representation will be reduced to 12.33 percent of the index on May 2, from 20.49 percent, Nasdaq OMX Group Inc. (NDAQ) said in a slide show on its website. While Microsoft (NASDAQ:MSFT) rose 0.90 percent and Cisco (NASDAQ:CSCO) gained 0.94 percent as their weighting will be increased.

U.S. Futures

Futures on the S&P 500 are up 0.34 percent, futures on the Dow Jones Industrial Average are up 0.28 percent and Nasdaq100 futures are up 0.40 percent.

The euro advanced 0.61 percent to 1.4309 against the dollar and the yen fell 0.21 percent. Crude oil futures gained 0.09 percent to $108.449 a barrel and gold futures rose 0.37 percent.

European Markets

European stock markets were mixed in early trade on Wednesday as financial sector shares declined on concerns over euro zone’s debt crisis.

The Stoxx Europe 600 Index declined 0.05 percent to 280.36. DAX30 gained 8.02 points or 0.11 percent to 7,183.33and FTSE 100 advanced 18.32 points or 0.30 percent to 6,025.38, while CAC 40 declined 18.04 points or 0.45 percent 4,023.70.

Among financials, Deutsche Bank AG declined 1.75 percent to 41.24 euros and Unicredit SpA declined 1.73 percent to 1.69 euros, while Societe Generale fell 1.97 percent to 44.425 euros.

Meanwhile, Commerzbank AG gained 2.21 percent to 5.72 euros after the bank said it will repay around 14.3 billion euros of government aid by June.

Mining stocks advanced as gold futures touched a new high and silver prices rose to a 31-year high. Randgold Resources Ltd. gained 1.8 percent and Vedanta Resources Plc. gained 0.8 percent.

Asian Markets

Asian stocks ended mixed on Wednesday after China raised interest rates for the fourth time since October.

Tokyo shares ended lower despite weaker yen as renewed concerns about nuclear crisis in Japan weighed. Benchmark Nikkei declined 0.32 percent or 31.18 points to 9,584.37.

The yen declined against major counterparts on expectations that the Bank of Japan will maintain easy monetary policy after Fed's possible tightening. The Japanese central bank began a two-day meeting to assess its next step to support the earthquake-hit economy.

Among the exporters, Sony Corp. declined 1.18 percent to 2,591yen and NEC Corp. declined 1.14 percent to 172 yen, while Canon Inc. advanced 0.55 percent to 3,620 yen.

Among the automakers, Honda Motor declined 1.32 percent to 2,895 yen and Nissan Motor declined 0.42 percent to 712 yen, while Toyota Motor advanced 0.15 percent to 3,265 yen

Chinese shares advanced, led by gains from financial stocks after China’s central bank surprised the markets by raising interest rates for the fourth time since October last year to curb inflation. Hong Kong’s Hang Seng index gained 134.47 points or 0.56 percent to 24,285.05 and Chinese Shanghai composite advanced 1.14 percent or 33.82 points to 3,001.23.

Ping An Insurance Group Co. gained 2.01 percent to HK$86.25 and Bank of China Ltd. advanced 1.13 percent to HK$4.47 in Hong Kong, while Bank of Communications surged 4.3 percent in Shanghai.

South Korean shares ended lower on Wednesday after posting a fresh record high in the previous session. Seoul composite declined 3.72 points or 0.17 percent to 2,126.71.