Friday 25 January 2008

Markets recover amid mixed economic data

It was a day of mixed economic news.

China's economy grew 11.2 percent in the fourth quarter, easing slightly from 11.5 percent in the third quarter. Inflation also cooled slightly in December to 6.5 percent from 6.9 percent in November.

Japan's all-industries index fell 0.5 percent in November while its export growth slowed to a 6.9-percent rate in December from 9.7 percent in November.

However, in Europe, Germany's Ifo business-climate index increased to 103.4 in January from 103 in December while the Belgian National Bank's business confidence indicator rose to minus 0.8 in January from minus 1.9 in December.

There was both good news and bad news from the US. Existing home sales fell 2.2 percent in December but jobless claims also fell by 1,000 to 301,000 last week.

But investors are looking past the bad news. From MarketWatch:

U.S. stocks on Thursday reclaimed higher ground for a second day after the White House and the House leadership unveiled a tentative economic stimulus package, lifting an equities market recently battered by worries about an economic recession.

"Relief gains on Wall Street extended into the second straight session after confirmation of quick action on the fiscal stimulus plan, hopes for a rescue plan for bond insurers and a sharp drop in jobless claims encouraged investors to take a fresh look at stocks after their recent 20% correction," said analysts at Action Economics.

The Dow Jones Industrial Average rose 108.4 points to 12,378.6, with 21 of its 30 components ending higher...

In Europe, shares posted their sharpest one-day advance in nearly five years.

And it was not just stocks that gained.

On the New York Mercantile Exchange, crude futures climbed for the first time in three sessions, with crude for March delivery closing up $2.42, or 2.8%, at $89.41.

Elsewhere on the NYME, gold futures surged nearly 3% to trade above $900 an ounce, with gold for February delivery rising $22.70 to end at $905.80.

Investors also seemed to have taken the news of rogue trading at Societe Generale in their strides.

No comments:

Post a Comment