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Current Futures: Dow +33.00, S&P +4.20, NASDAQ +2.50
European markets and U.S. futures rose initially after the World Bank raised China’s growth forecast for the current year. However, European shares could not stay above the break-even line, as hard as they tried to, for the first time in five days.
The World Bank raised China’s growth forecast to 7.2% this year, up from 6.5%, joining the list of major forecasters that see stronger growth in the world’s most dynamic economy. Currently, investors see China, Brazil, India and to some extend Russia, as the world’s main growth engine. As such, most market participants interpret a higher growth forecast as positive news because it adds further signs that the global recession is easing, TheLFB-Forex.com Trade Team said. In the commodity markets, China was responsible for a large percentage of order flows over the last few years.
Most sectors advanced initially in Europe, but the financials continued to trade mixed following the downgrades made by the rating agency S&P. Moreover, at the beginning of the week, a large number of European banks were downgraded by the three major rating agencies. In U.K. FTSE trade, the mining company Xstrata was the best performing stock, having recently been upgraded to “buy” by two different banks. Also in the the U.K. FTSE, Barclays lost 1% after its CEO announced that the bank is planning to become a major Wall Street bank.
Overnight, the U.K. Ftse lost 20.7 points (0.48%) to 4,257, while the German Dax dropped 18.7 points (0.39%) to 4781.
Crude oil for July delivery was recently trading at $71.50 per barrel, higher by $0.60.
Gold for July delivery was recently trading up by $4.80 to $940.80.
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