A Little Of This And A Little Of That

A Little Of This And A Little Of That From Financial Markets Around The Globe

Commodities and equities took a breather and were seen recuperating from the recent slump though persistent worries over euro zone debt crisis and political uncertainty in Greece made investors remain guarded.

Rebound in euro from a four month low levels earlier today lifted the sentiments. However, by afternoon euro was seen paring the earlier gains. Spot gold rebounded from a four and a half month low, gaining around one per cent.

Steep declines might have probably attracted bargain hunting. In the MCX, gold rose, tracking gains in the global markets. Downtrend in rupee provided firm support too. Rupee continued to spiral down to new lows following an initial pullback.

Meanwhile, gold demand from China rose to a record high during the first quarter and toppled India as the biggest bullion market according to World Gold Council.

Base metals rose in LME and Shanghai with copper gaining more than one per cent, snapping its four day fall. Crude oil in Nymex rebound from a six month low levels on expectation that the inventory glut may ease at the main storage hub in the U.S.

Also, better than expected expansion in Japanese economy during the first quarter of this year lifted the prices too. Earlier, Spanish bond auction saw borrowing cost inching higher amid growing concerns over Greece’s future in the European Union, further raising concern bars for investors.

Market mood was seen recovering after Federal Reserve indicated during its FOMC minutes at a possible easing, in case the U.S economy derails from its present recuperation.

However, sentiments out of Europe continue to downplay investor emotions as the European Central Bank (ECB) paused lending to some Greek banks.  The current economic environment is more likely to revolve around Europe amid political unrest in the region, in spite of the recent encouraging economic numbers from the world’s leading economy.

With the labour market in the U.S showing signs of stagnation, the markets would be looking forward to encouraging figures from the U.S weekly jobless claims, which were a disappointment; figures matched the previous weeks total with virtually no change.

Although US Building Permits declined to 0.72 million in April as against 0.77 million in March. Housing Starts increased to 0.72 million in last month from 0.70 million in March.

Capacity Utilization Rate in the US rose to 79.2 percent in April compared to 78.4 percent a month ago. Industrial Production rose by 1.1 percent in prior month with respect to decline of 0.6 percent a month earlier. Mortgage Delinquencies was at 7.40 percent in Q1 of 2012 when compared to 7.58 percent of Q4 of 2011.

Manufacturing activity in the Philadelphia-region contracted for the first time in eight months in May, adding to concerns over the pace of the U.S. economic recovery, official data showed on Thursday. In a report, the Federal Reserve Bank of Philadelphia said that it’s manufacturing index dropped by 14.3 points to minus 5.8 in May from April’s reading of 8.5. This was offset by yesterday’s positive Empire State Index which was above forecast.

The recent string of weak numbers from China is raising fresh concerns about the pliability of the Chinese economy amid softening global demand and in that regards, housing numbers from the country would be an important economic event in coming days and could have significant bearing on commodity prices.