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Energy Stocks Lead in HK, Shanghai
May 21, 5:12 PM EDT |
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| Less than 5% of insurance claims are recoverable in the recent Sichuan earthquake. |
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| Hong Kong stock indexes gained on the heightened speculation that China will soon allow prices for oil products to increase. Traders speculated that Beijing will increase subsidies for oil refiners to cushion them from mounting losses on higher feedstock costs. In Hong Kong trading Hang Seng Index rose 1.16% or 290.83. Renminbi advanced to a level of 6.96 to one U.S. dollar. |
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Fed Minutes Drag Stocks Lower, Crude Surges
May 21, 4:47 PM EDT |
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| Stocks of the parents of American Airlines and United Airlines plunged 25% after the crude oil price surged above $133 a barrel. |
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| U.S. stocks fell after the Fed minutes showed that future rate cuts may not be necessary unless the economy deteriorates further. The Fed officials appear to think that risks of inflation and impediments to growth appear to be in balance. The Fed monetary policies have come under heavy criticism and follow in the footsteps of the loose credit path initiated during the Greenspan time. The U.S. stocks fell sharply after the minutes release and crude oil surged above $133 a barrel. |
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Weak Financials Drag Nikkei
May 21, 3:42 PM EDT |
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| A group of banks in Japan extend credit facility to Venezuela to expand refineries. |
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| Weak financial stocks led market indexes in Japan lower. Oppenheimer & Company forecasted $170 billion of additional write-off at financial institutions by the end of 2009. The additional losses at banks in the U.S. will likely lead to another round of losses at banks in Japan. Mitsui & Company led consortium has agreed to extend loan of as much as $3.4 billion to Venezuela to expand refineries. |
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German Confidence Index Up
May 21, 3:25 PM EDT |
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| Stocks in Germany and France fall as crude oil trades above $131 a barrel. Strong euro, at least for now is not a problem for most German companies. |
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| Rising crude prices dominated trading sentiment in the European markets. However, German business confidence index rose in May and outlook for the six months appear positive according to the businesses surveyed. German businesses and economy is able to withstand strong euro as exports remain strong to the Middle East and Asia. In Germany, the DAX 30 declined 1.1% or 74.4 and the French CAC 40 lost 0.7% or 22.60. |
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Weak Rupee, Record Crude, Surging Inflation
May 21, 2:49 PM EDT |
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| Stocks in Mumbai trading fell after inflation fears dominated the trading sentiment. Rupee fell against dollar as crude oil rose to a record high. |
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| Stocks in India fell as inflation continue to hover near 3-year high, crude reached another record and weak rupee against dollar. Sensex fell 13 points to 17,243. Daily turnover on the BSE stood at 7,077 crore rupees and on the National Stock Exchange the turnover was recorded at 15,279 crore rupees. The RBI approved the merger between HDFC Bank and Centurion Bank of Punjab. Rupee fell to 42.83 against the U.S. dollar. |
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AMR and United Down 25%, Crude at $132
May 21, 3:44 PM EDT |
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| Crude oil trades above $132 a barrel after the release of weekly inventory report. Airlines and transportation stocks decline. |
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| U.S. stocks struggled after the release of weekly petroleum report. Crude oil surged above $132 a barrel on the decline in crude oil supply at the end of the last week. Airlines stocks fell after AMR, the parent of American Airlines decided to lower 12% of its capacity and retire 75 planes. AMR suggested $15 fee for each checked bag. UAL plunged 25% and Delta and Jet Blue declined as well. |
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Crude Oil Futures Surge, U.S. Stocks Lower
May 21, 4:23 PM EDT |
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| Weak dollar, Iraq occupation and sustained demand from the U.S., China and India is expected to push oil demand above supply in 2012. |
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| Crude oil futures, near and long term rocketed past $140 a barrel as speculators expect prices to reach $190 a barrel. Rising consumption of crude oil in the U.S., China and India is expected to lift the demand above 85 million barrels a day by 2012. However, world crude oil supply has been relatively stable near that level. Lack of new crude supply in the market and the occupation of Iraq are contributing to the sustained rise in oil prices. |
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