Published On: Wed, Nov 21st, 2012

Stocks in Pakistan Set Record

Stock future in the United States remained steady on Tuesday following the United States housing report. This report showed that new residential construction in the world’s largest economy advanced by 3.6 percent in the month of October. Seasonally adjusted, this equates to a rate of 849,000. The new data marks the highest rate for the United States in over four years. At the same time, housing permits remained in line with economist expectations at a level of 866,000.

Less than one hour before it opened, futures on the Dow Jones Industrial Average dropped by one percent, or 15 points, to a level of 12,723. During the trading session, the Dow Jones advanced by 207.65 points, or 1.7 percent. This marked its largest rise in one session since September 6. The Standard & Poor’s 500-stock index rose by 27.01 points or two percent. Futures on the Standard & Poor’s 500 index rose by four points, or 0.2 percent, to reach a level of 2,590 before the opening bell. The Nasdaq also rose by 2.2 percent, or 62.94 points.

Hewlett-Packard Drops

Shares in the computer maker, Hewlett Packard, dropped by 10 percent during premarket trading. The computer giant suffered from an enormous write-down that was unexpected by investors. Last year, Hewlett-Packard purchased a software developer, Autonomy Corporation. According to Hewlett- Packard, Autonomy Corporation failed to disclose failures and suffered from severe accounting improprieties.

Toronto Prepared to Open Lower on Tuesday

Canada’s main stock market prepared for a lower opening on Tuesday. Amid a credit rating decrease in France, the Toronto stock market was expected to reach lower than hoped for levels. Canada’s currency was 0.01 of a cent lower at a level of $1.0033 United States dollars.

On Monday, the TSX managed to make respectable gains as the United States began discussing a solution to the ongoing fiscal crisis plaguing the nation. It jumped 163 points on Monday while the Dow Jones Industrial Average grew by 208 points.

Commodity Prices Fall

Prices for January crude oil contracts dropped on Monday by 44 cents. They currently fetch a rate of US$88.84 per barrel. Over the last two sessions, prices for oil have risen dramatically due to fighting in the Middle East. Many investors are concerned about the possibility that the fighting between Hamas and Israel could move into other nations in the area. If this happens, it would threaten the ability of the Middle East to ship oil to other nations.

December bullion fell during the session by $3.30 to a level of $1,731.10 per ounce. Metal prices also dropped. On Monday, December copper advanced by eight cents. By Tuesday, it lost another two cents to US$3.51.

The oldest company in Canada, Hudson’s Bay Company, reported on Monday that it would return to the public stock market values shares totaling about $2 billion. It plans to sell off 21 million shares at about $17 per share. This represents roughly one-fifth of Hudson’s Bay Company’s stock. The company is also expected to raise nearly $365 million through an initial public offering.

European Markets Drop

Overall, stock markets in Europe were mostly lower for the day. The United Kingdom’s FTSE 100 retreated by 0.18 percent while the French CAC 40 fell by 0.4 percent. In Germany, Frankfurt’s DAX advanced by 0.04 percent.

Asian shares were mostly mixed on Tuesday with Hong Kong’s Hang Seng dropping by 0.2 percent to 21,228.28. In Australia, the S&P/ASX 200 rose by 0.6 percent. Japan’s Nikkei 225 index lost by 0.1 percent following a decision by the Bank of Japan to keep interest rates the same. It ended the session at 9.142.64. The Shanghai Composite Index dropped by 0.4 percent to 2,008.92 while the Shenzhen Composite Index retreated by 0.2 percent to 799.35. . In South Korea, the Kospi advanced by 0.6 percent to reach a level of 1,890.18.

European Finance Meeting

On Tuesday, European Finance ministers are expected to meet in Greece. During the meeting, finance ministers are expected to decide on granting Greece its next round of rescue. For the past few weeks, the Eurozone has delayed sending Greece its next bailout tranche. The delay was caused by unmet budget cuts in Greece and deliberation by investors about the needed amount of austerity measures. In order to operate from day to day, Greece must have the bailout funds. If it does not receive the 31.5 billion euros in the coming weeks, it could run out of funds to pay for normal government operations.

Due to the continued concern over debt in the Eurozone, Moody’s chose to lower France’s credit rating by a notch. France is exposed to the Greek crisis through its participation in the Eurozone and has to deal with some of its own reforms.

In the United States, the chairman of the Federal Reserve Bank, Ben Bernanke, is supposed to present a speech on the state of the world’s biggest economy. Investors will be listening closely to the speech to glean clues about future Federal Reserve measures. At the end of this year, the Federal Reserve is expected to end its current Operation Twist program.

Pakistani Stocks Set Record

On Tuesday, Pakistani stock advanced slightly higher. This marks a record high for the second straight day. The Karachi Stock Exchange benchmark 100 index rose by 0.41 points to reach 16,251.79. This is the highest settlement for Pakistan’s stock market and is close to its peak level of 16,292.45.  This level was previously reached during intra-day trading on November 12.

Most of the advance in Pakistan’s stock market was caused by telecommunication firms like PTCL. During the session, shares in PTCL advanced by 3.05 percent or 0.54 rupees. They ended at 18.22 rupees per share. At the same time, DG Khan cement gained by 0.26 percent, or 0.14 rupees, to reach a level of 53.75 per share.

Losers for the day included companies like Jahangir Sidiqui and Fauji Cement. Jahangir Sidiqui saw its share prices fall by 5.93 percent to a level of 15.86. Meanwhile, Fauji Cement lost 0.11 rupees, or 1.6 percent, to end at 6.76 per share.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.