Global stock markets began the week with a good start while gold heftily suffered its biggest one-day fall this year as concerns regarding Eurozone banks faded and eager spirits were ignited by a fresh bout of bid and merger activities.
The mood did substantially improved as Citigroup’s quarterly earnings came in ahead of expectations following the narrowing out of special items and setting a positive tone for a busy calendar of corporate result in the preceding week.
In New York, the S&P 500 index went up 0.5 % at 1,977 which was able to recover from a sizable chunk of last week’s decline which left the equity benchmark just 0.4 % below its previous record closing high. The Dow Jones Industrial Average was able to move back again above the 17,000 as it climbed 0.7 %.
Citigroup shares were up more than 3 % in the later trade following the agreement settlement with the U.S. authorities regarding the sale of mortgage-supported securities which assisted its earnings per share down a little from the same period of last year but was still ahead of Wall Street estimates.
The mood was somewhat akin to a buoyant cross Atlantic setting where the FTSE Eurofirst 300 index rallied 0.8 % after last week’s 3 % slide and the Xetra Dax in Frankfurt climbed 1.2 %. The shares in Shire , the Dublin based drug group was able to hit a record high after its board filed a recommendation to refresh the £31bn offer from AbbVie of the US.
The improved tone in equities came late last week following the bout of Eurozone angst which were largely triggered by apprehensions regarding the financial health of Portugal’s Banco Espiritu Santo was silenced for the meantime.
The participants are more likely to standby for any signs of stress among Eurozone lenders specifically in the region’s peripheral’s nations. With Portugal’s ten-year government bond yield which momentarily pushed 4 % at the height of last week’s nervousness, fell to another 4 basis points to 3.82 % having declined as much as 10bp.
Spanish and Italian yields held a stable position with the yield on the German 10-year bund which last week hit the lowers since last year as apprehensive investors sought safety was left unchanged at 1.21 %. The ten-year U.S. Treasury yield was up 2bp at 2.54 %.
Gold, which landed its highest level in more than three-months has experienced a much steeper fall, with the metal plummeting down $31 or 2.3 % at $1,306 per ounce its largest single-session percentage drop since early December.
Analysts were able to note last Friday’s close that gold had risen 11 % by far for this year and had risen 7.5 % in sterling terms despite of the pound’s strong performance against the dollar.
Less than a few commentators have noticed that its previous report highlighted that the jewellery demand during the first quarter of the year represented the strongest start to the year in more than nine years.
Data from the U.S. Commodity Futures Trading Commission revealed that the net long positions in gold rose 5.4 % in the week to July 8 to the highest level in two years.
Analysts suggested that the precious metal was no looking overbought on a technical perspective. It was a relatively calm day in the currency market as the yen gave back several of its week’s gains. The dollar was up 0.2 % against the Japanese currency whereas the euro was 0.3 % higher correspondingly.
The single currency was relatively steady against the dollar at $1,3611 despite the weak Eurozone industrial production data for the second quarter which was highlighted of the region’s economic recuperation.
Among the industrial commodities, it was copper that fell 0.5 % in London which eased at $7,120 a ton while zinc landed a three-year high before paring its advance to end 0.2 % higher.
Finally, Brent crude settled 32 cents higher at $106.98 per barrel as persisting concerns over possible supply disruption provided rather different support.