Markets remain calm ahead of raft of US news
APLONDON--Markets were relatively becalmed Tuesday for the second day running as investors awaited key data on the U.S. economy that could indicate whether the optimistic start to the year will continue.
January 30, 2013, 12:07 am TWN
Many stock indexes around the world have hit multi-year highs and the Dow Jones Industrial Average is not far off its all-time peak, achieved in 2007 just before the financial crisis started baring its teeth.
One of the reasons why markets have enjoyed such a strong start to the year is optimism over the U.S. economy. Over the coming days, investors will be inundated with a raft of figures, culminating on Friday with the monthly nonfarm payrolls report for January. The payrolls figures often provide the markets direction for a week or two after their release.
In the run-up to that statement, markets around the world have so far traded this week in fairly narrow ranges, particularly in Europe and the U.S. In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,304 while Germany's DAX fell 0.1 percent to 7,826. The CAC-40 in France was 0.2-percent lower at 3,774.
There's a lot to get through before Friday, though, most notably on Wednesday when the U.S. Federal Reserve concludes its latest two-day policy meeting. At their last meeting, there were signs that some rate-setters were poised to bring an end to the era of super-loose monetary policy.
“The Fed statement tomorrow is likely to be the most eagerly anticipated news of the week,” said Rebecca O'Keeffe, head of investment at Interactive Investor.
Wall Street was poised for modest losses at the open Tuesday, with both Dow futures and the broader S&P 500 futures down 0.1 percent.
The main point of interest later Tuesday may be the monthly U.S. consumer confidence report from the Conference Board — particularly as the recent budget agreement between the White House and Congress has led to some tax rises.
U.S. earnings statements continue, with more than one-fifth of the companies in the S&P 500 reporting this week. Ford and Amazon are due to report Tuesday.
“Traders' resolve to keep building out this rally certainly has the potential to be tested yet again,” said Fawad Razaqzada, market strategist at GFT Markets.
Asian markets rose on Tuesday as traders awaited key economic data out of the United States and China later in the week and the start of the corporate earnings season.
Tokyo climbed 0.39 percent, or 42.41 points, to 10,866.72 and Sydney jumped 1.11 percent as dealers returned from a long weekend, the index adding 53.8 points to end at 4,889.0.
Seoul added 0.84 percent, or 16.25 points, to 1,955.96, while Hong Kong ended flat, edging down 16.71 points to 23,655.17.
Shanghai rose 0.53 percent, or 12.47 points, to 2,358.98, extending strong gains from the previous session as confidence in the mainland economy grows stronger.
However, there was a certain amount of caution as the corporate earning season begins this week in Japan.
Despite a better-than-expected rise in orders for durable goods — a key pointer to consumer confidence — the lead from Wall Street was anemic as profit-takers moved in following a strong finish to last week.
The Dow eased 0.10 percent and the S&P 500 fell 0.18 percent after the two indexes on Friday hit levels not seen since late 2007.
However, the Nasdaq rose 0.15 percent, boosted by a slight rebound in Apple.
In Mumbai shares rose 0.32 percent after the Reserve Bank of India decided to cut interest rates for the first time in nine months, by 0.25 percentage points, and reduced the amount of cash banks must keep in reserve.
Gold was at US$1,663.00 at 0830 GMT compared with US$1,655.09 late Monday.
In other markets:
— Manila rose 0.68 percent, or 42.31 points, to a record high 6,234.73.
— Wellington fell 0.10 percent, or 4.15 points, to 4,200.29.