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CMC Markets – Evening Update 26/11/12

By Donal Nee
CMC Markets Singapore

Asian markets mostly finished higher today as investors wait for news from the Eurozone finance minister’s meeting on a Greek aid deal. Markets were also given a boost as they followed the positive lead from the U.S on Friday night. Stocks in the U.S rose for a fifth day during a holiday-shortened week however volume was the lightest of the year on Friday night. The S&P 500 racked up its second best week of 2012 at it closed up 1.3% while the Dow closed up 1.35%.

Today however we saw a more cautious approach from investors as tonight the Eurogroup will make yet another attempt at reaching agreement on the third financial assistance programme for Greece. This may come in the form of a few potential scenarios such as lower interest rates on Greek debt, debt buybacks or a compromise with the IMF to extend the target date for debt at 120% of GDP however all options will be looked through with a fine tooth comb especially with the German parliament elections just around the corner.

Japan’s Nikkei finished in the black today as the index close up 0.24% hitting 7 month highs. The Australian market closed up a modest 0.25% in what was a pretty quiet session, materials gained 0.7%, energy rose 0.6%, while financials ended virtually flat.

In Hong Kong, the Hang Seng Index gave back some of the gains it posted in last week’s session as it closed down 0.26%, the losses came as finance companies traded lower today with HSBC Bank falling by as much as 0.13% The local Singapore market extended its winning streak as it managed to close up over 0.55%. Adding to these gains was commodities trader Noble group, up over 3.5%. However, rig builder Sembcorp Marine fell by 0.25%, these falls came as a local broking house cut its price target on the stock.

Gold fell nearly 2% today to $1749 an ounce as the precious metal gave back some of the strong gains witness on Friday nights session where it hit a high of $1753 an ounce. U.S Crude Oil fell for the first time in 3 days, dropping by as much as 0.2% to $88.25 a barrel. This comes as a cease-fire between Israel and Hamas held steady.

Tonight the Eurozone finance ministers continue their debate around the next round of loans to Greece and any more delays in resolving the issue could have traders reaching for the red sell button. Tuesday we will have the GDP reading from the UK which is expected to return a reading of 1% for the quarter and for the year on year measurements to remain unchanged at zero GDP growth.

Wednesday night we will get another insight into the US housing market with the weekly mortgage application figure and New Home Sales data for October which is expected to come in marginally lower than September. Any surprise to the upside could give markets a kick as house price growth is seen as crucial to US economic recovery.

Later that session we will also get to see the latest installment of the Fed’s Beige book which is published just before the FOMC meetings and give insight into changes in the economy since the last meeting.