World Market Update 21/03/2011

U.S. Markets

US stocks ended higher on Friday as sentiment was buoyed after Libya announced a cease-fire and the Group of Seven (G-7) Finance ministers agreed to intervene in the markets to stabilize the Japanese yen.

The Dow Jones industrial average was up 89.93 points, or 0.71 percent, at 11,858.52. The Standard & Poor's 500 Index was up 5.48 points, or 0.43 percent, at 1,279.20. The Nasdaq Composite Index was up 9.14 points, or 0.29 percent, at 2,643.67.

Intervening for the first time in currency markets since 2000, the G-7 officials said that the United States, the United Kingdom, Canada, and the European Central Bank will join Japan in concerted intervention in exchange markets from Friday.

The yen plunged 2.14 percent to 80.5840 against greenback after the Federal Reserve confirmed it was buying dollars against the yen. The Japanese yen had strengthened significantly following the country’s tragic earthquake -- the fear was that the high yen would drag Japan into a recession.

Earlier Friday, Libyan foreign secretary Moussa Koussa said on state TV that the ruling government “decided on an immediate ceasefire and on an immediate stop to all military operations.” This conciliatory announcement was in response to the UN decision to enforce a no-fly zone over Libya.

On this news, crude oil futures immediately plunged from about $104 per barrel to about $101.07 per barrel because concerns over the further disruption in the oil production of Libya and Middle East countries were eased.

On the corporate front, Nike, Inc. (NYSE:NKE) shares plunged 9.16 percent to $77.59 after its third quarter earnings fell short of expectations. The company reported third quarter net income of $523 million or $1.08 per share compared to $497 million or $1.01 per share in the same quarter last year, while analysts estimated net income of $1.11 per share.

Shares of Celera Corp. (NASDAQ:CRA) climbed 33.97 percent after Quest Diagnostics Inc. (NYSE: DGX) announced an agreement to acquire the diagnostics kit maker for $8 per share to gain immediate access to genetic tests and pipeline of biomarkers.

U.S. Futures

Futures on the S&P 500 are up 1.15 percent, futures on the Dow Jones Industrial Average are up 0.92 percent and Nasdaq100 futures are up 1.16 percent.

The euro declined 0.15 percent to 1.4161 against the dollar and the yen declined 0.67 percent against the greenback. Crude oil futures advanced 1.57 percent to $102.66 a barrel and gold futures advanced 0.70 percent.

European Markets

European stock markets advanced in early trade on Monday, tracking positive cues from Asian stocks after Japan made progress in its battle to control radiation leaks at a crippled plant.

The Stoxx Europe 600 Index advanced 1.61 percent to 271.94. DAX30 gained 155.54 points or 2.33 percent to 6,819.94, CAC 40 advanced 73.26 points or 1.92 percent 3,88.48 and the FTSE 100 gained 72.10 points or 1.26 percent to 5,790.23.

Deutsche Telekom AG jumped 13 percent to 30 euros after AT&T announced that will buy T-Mobile USA from German company Deutsche Telekom for $39 billion. Deutsche Telekom stock was upgraded to “overweight” rating from “underweight” rating at HSBC Holdings Plc.

Among other telecom stocks, Vodafone Group Plc. gained 4.42 percent and BT Group Plc. gained 2.82 percent.

Taylor Wimpey Plc gained 3 percent after the company stock was upgraded to “outperform” rating from “neutral” rating at Credit Suisse.

Asian Markets

Asian stock markets ended higher on Monday, as sentiment was buoyed after Japan made progress in its battle to control radiation leaks at a crippled plant.

Energy sector stocks gained as oil prices climbed to near $103 a barrel in Asian trade after the British, French and American jets conducted bombing and attack operations over Libya on Sunday to enforce a no-fly zone over the country to stop Gaddafi's forces from killing civilians.

Meanwhile, the yen fell for a second day during Asian trade on speculation that the G-7 will continue its stimulus to sell the yen versus the greenback to curb the yen's appreciation.

Hong Kong’s Hang Seng index advanced 384.99 points or 1.73 percent to 22,685.22 and Chinese Shanghai composite gained 0.10 percent or 2.93 points to 2,909.81.

Among oil and gas stocks, PetroChina surged 3.29 percent to HK$10.66 and China Shenhua Energy gained 3.09 percent to HK$34.95, while CNOOC Ltd., China's largest offshore oil driller, gained 3.59 percent to HK$17.86.

South Korean shares ended higher with benchmark Seoul composite gaining 22.29 points or 1.13 percent to 2,003.42. KEPCO Engineering & Construction shares surged 9.29 percent and KEPCO Plant Service & Engineering climbed 12.16 percent.

Among transporters and tour agency shares, Korean Air Line surged 4.49 percent and Asiana Airlines climbed 6.91 percent, while Hana Tour Service Inc. gained 2.1 percent and Modetour Network Inc. gained 5.82 percent.

Japanese stock markets are closed for a national holiday on Monday.