World Market Update 22/03/2011

U.S. Markets

U.S. stocks surged on Monday as sentiment was buoyed after Japan made progress in its battle to control radiation leaks at a crippled plant, and AT&T announced that it will buy T-Mobile USA from German company Deutsche Telekom to create the largest mobile provider in the United States.

The Dow Jones industrial average was up 178.01 points, or 1.50 percent, at 12,036.53. The Standard & Poor's 500 Index was up 19.18 points, or 1.50 percent, at 1,298.38. The Nasdaq Composite Index was up 48.42 points, or 1.83 percent, at 2,692.09.

The latest news out of Japan have been positive; power is back on at the Fukushima Daiichi power plant and companies are beginning to resume operations.

On the corporate front, shares of AT&T Inc. (NYSE:T) advanced 1.15 percent after the company announced that it will buy T-Mobile USA from German company Deutsche Telekom for $39 billion.

Meanwhile, Sprint Nextel Corp. (NYSE:S) shares plunged 13.61 percent as the AT&T deal has negative implications for Sprint and Clearwire (NASDAQ: CLWR), where a network sharing announcement ahead of a merger between Sprint, Clearwire and T-Mobile was widely anticipated.

On the economic front, existing home sales in the US fell more than expected in February, indicating an uneven recovery in the housing industry. Sales of previously owned homes dropped 9.6 percent to 4.88 million in February compared with an upwardly revised figure of 5.40 million in January and against economists’ estimation of 5.05 million in February.

U.S. Futures

Futures on the S&P 500 are up 0.17 percent, futures on the Dow Jones Industrial Average are up 0.22 percent and Nasdaq100 futures are up 0.22 percent.

The euro advanced 0.04 percent to 1.4232 against the dollar and the yen declined 0.11 percent against the greenback. Crude oil futures declined 0.04 percent to $102.29 a barrel and gold futures advanced 0.27 percent.

European Markets

European stock markets advanced in early trade on Tuesday, tracking positive cues from Asian stocks and rally on Wall Street overnight.

The Stoxx Europe 600 Index advanced 0.43 percent to 273.51. DAX30 gained 7.53 points or 0.11 percent to 6,823.65, CAC 40 advanced 19.27 points or 0.49 percent 3,923.72 and the FTSE 100 gained 21.14 points or 0.37 percent to 5,807.23.

Schroders Plc gained 1.72 percent after the company stock was upgraded to “buy” rating from “hold” rating at Citigroup.

Sanofi-Aventis SA declined 1.66 percent after terminating its plan with Merck & Co. to combine the companies’ animal health businesses.

Cairn Energy PLC gained 1.59 percent as its 2010 net profit rose to $794.3 million and Punch Taverns surged 5.4 percent after the company said it plans to split into two publicly traded companies.

Among insurers, Prudential PLC gained 0.62 percent and Standard Life PLC advanced 1.31 percent.

Nestle SA declined 0.68 percent to 39.28 euros after the company stock was downgraded to “neutral” rating from “overweight” rating at J.P. Morgan Cazenove.

Asian Markets

Asian stock markets ended higher on Tuesday, with Tokyo shares leading the gains after Japan made progress in its battle to control radiation leaks at a crippled plant.

Tokyo shares surged on Tuesday after Japanese officials reported that the situation in quake-hit nuclear plants is stabilizing. Benchmark Nikkei climbed 4.36 percent or 401.57 points to 9,608.32.

Among the exporters, Honda Motor gained 2.1 percent to 3,145 yen and Canon Inc. advanced 3.12 percent to 3,635 yen, while Sony Corp. advanced 3.21 percent to 2,600 yen.

Shares of Tokyo Electric Power, Japan's biggest utility and operator of the Fukushima nuclear-power plant, surged 16.8 percent to 1,098 yen after gaining 19 percent on Friday.

Advantest Corp. climbed 9.77 percent to 1,449 yen after the company said it saw major progress in its bid to buy Verigy. Verigy said Advantest’s takeover bid is superior to a proposal from another company.

Toshiba Corp. surged 12.77 percent to 406 yen after the Nikkei newspaper reported the company plans to pay a fiscal-year-end dividend.

Hong Kong’s Hang Seng index advanced 172.68 points or 0.76 percent to 22,857.90 and Chinese Shanghai composite gained 0.34 percent or 10.03 points to 2,919.17.

China’s largest offshore oil producer Cnooc Ltd. gained 3.02 percent to HK$18.40 and PetroChina Co. advanced 2.62 percent to HK$10.94. Among airlines, Cathay Pacific Airways advanced 3.05 percent and China Eastern Airlines Co. gained 4.06 percent.

South Korean shares ended higher, led by gains from automakers, refiners companies’ shares. Seoul composite advanced 10.24 points or 0.51 percent to 2,013.66. Hyundai Motor surged 4.42 percent and Kia Motors gained 3.57 percent.