Global Markets Overview - 09/28/2011

US Markets

U.S. stocks rose Tuesday, even as a sharp afternoon downdraft prompted U.S. stocks to erase more than half of their earlier gains, as investors fretted over a report that highlighted a potential split in the euro zone over the terms of Greece's second bailout. The Dow Jones Industrial Average finished the session up 146.83 points, or 1.3%, at 11190.69, after surging as much as 325 points earlier in the session. The gains came a day after the blue-chip index climbed 272 points.

The Standard & Poor's 500-stock index gained 12.43 points, or 1.1%, to 1175.38. Each of the 10 sectors in the index finished in positive territory. The technology-oriented Nasdaq Composite closed up 30.14 points, or 1.2%, to 2546.83. Stocks pared gains in the final trading hour after the Financial Times reported a split has developed in the euro zone over the terms of Greece's second bailout package.

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As many as seven of the bloc's 17 members are arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, the FT said, citing senior European officials. Traders pointed to this report as one of the main catalysts that prompted the major stock indexes to finish the day well off their session highs. The report came after Greece's parliament approved a new property tax law in a closely watched vote, taking a key step in the country's efforts to secure further aid from its international creditors and avoid default. Still, the market action in the final trading hour highlighted how jittery traders and investors have become in this turbulent trading environment.

In the U.S., fears of a potential government shutdown were assuaged after a deadlock on budget talks was broken, leading the Senate to approve a bill late Monday to fund the government through Nov. 18. The House is likely to approve the bill as well. Investors largely overlooked another bleak reading on consumer sentiment. The Conference Board, a private research group, said its index of consumer confidence edged up to 45.4 in September from a revised 45.2 last month. The level is down sharply from July's 59.2 reading.

European Stock Markets

European stocks surged Tuesday, with oil and gold prices also firmly on the front foot, as the prospect of a beefed-up euro-zone bailout facility underpinned sentiment. The Stoxx Europe 600 index closed up 4.4% at 229.91. The U.K.'s FTSE 100 index added 4% to 5294.05, France's CAC-40 index ended up 5.7% at 3023.38 and Germany's DAX advanced 5.3% to 5628.44. In terms of sectors, basic resources were the standout performers. The Stoxx Europe 600 resources index ended up 7.5% at 422.20, as key metals prices rebounded and following heavy losses in the previous session. Shares of silver and gold miner Fresnillo rose 10% as silver prices soared. Banks were again among the top performers. French banks led the rally in Europe, including a 14% jump for BNP Paribas and a 17% gain for Societe Generale. The two have been among those hit the hardest in recent months amid worries over their exposure to troubled European countries and their ability to raise funds. Other European banks did almost as well, with Deutsche Bank up 13% in Frankfurt and Barclays gaining 8% in London. Investors continued to take heart from the fact that European leaders appear more determined to tackle the euro-zone debt crisis. Since the weekend meeting of the World Bank and International Monetary Fund, expectations have been mounting that the area's leaders will do their utmost to contain Greece's debt problem and increase the size of the European Financial Stability Facility. But despite the stellar session, market participants warned there remains a degree of doubt as to what the final rescue package will actually look like and importantly, its timing.

Asian Stock Markets

Asian stocks ended sharply higher Tuesday on signs European policy makers were making progress on stabilizing the region's debt crisis. After sharp losses Monday, the Nikkei Stock Average jumped 2.8% to 8609.95, South Korea's Kospi surged 5.0% to 1735.71, Hong Kong's Hang Seng Index advanced 4.2% to 18,130.55, and the Shanghai Composite Index rose 0.9% to 2415.05. Southeast Asian markets, among the hardest hit in the recent selloff, also surged, with Indonesian shares ending up 4.8% at 3473.94 and Malaysia's KLCI adding 2.4% to 1364.20. Financial stocks rebounded around the region after posting sharp losses in recent weeks. In Tokyo, Sumitomo Mitsui Financial Group added 3.4%, while in Seoul, Hana Financial Group surged 8.1%. HSBC climbed 3.6% in Hong Kong. Resources plays also advanced as oil, copper and gold prices retraced some recent losses. Hong Kong-listed oil company Cnooc advanced 7.7% and Seoul-listed S-Oil tacked on 8.6%. Among metals plays, Hong Kong-listed Jiangxi Copper surged 17.3%, while its Shanghai shares added 0.9%.


Copper closed 4.5% higher on the London Metal Exchange Tuesday as base metal prices recovered on increasing optimism that a solution will be found for Europe's debt woes. Three-month copper ended at $7,593 a metric ton, up $327 on the previous close. Oil futures rallied 5.3% Tuesday as stock markets around the world cheered reports that European officials are hatching a plan to boost the euro zone's bailout fund and contain the area's sovereign-debt crisis. Crude oil for November delivery rose $4.21, or 5.3%, to settle at $84.45 a barrel on the New York Mercantile Exchange. Oil changed hands for as much as $84.77 a barrel. The settlement was oil's highest finish in nearly a week. Gold recaptured the psychologically important $1,600 level, while silver rallied 5%, on hopes that Europe is making progress with its debt crisis. Gold prices bounced back from their lowest settlement in two months, with December-delivery futures settling $57.70, or 3.6%, higher at $1,652.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Thinly traded September-delivery gold ended up $58.10, or 3.7%, at $1,650.60 a troy ounce. Silver for December delivery, the most active contract, rallied $1.560, or 5.2%, to settle at $31.536 a troy ounce.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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