Daily Market Analysis

Still not quite ready to call a rally yet. After all, there are such things as Bull Traps.Rally after lunchtime there with volumes up during final hours of trading.

After a weak start at their lowest levels since December, June stock index futures rallied throughout the session today. There seemed to be a number of factors working in favour of an upside rebound, including a return of risk appetites and a round of favorable US economic data. The highlights of last night's US economic data showed the February Consumer Price Index jumping at its fastest clip since September 2009 and Manufacturing Activity in the Mid-Atlantic region coming in much higher than expected. Natural resource stocks were among the best performers today, as they seemed to benefit from the rally in physical commodity markets. Oil service shares were up more than 3.5% in response to a rally in crude oil prices.

However, there did seem to be a late-day pause, as traders faced a G-7 conference call in the later hours, possible intervention to temper the rise in the Japanese Yen and ongoing uncertainty in the Middle East and North Africa region.


Market Moving Factors:

• Oil prices push past $100/brl
• Dollar extends drop against yen
• Initial jobless claims fall in line with Briefing.com consensus
• CPI increases slightly more than expected
• Philly Fed Index surges to 25-year high

Asian Markets Close: Nikkei -1.4%, Hang Seng -1.8%, Shanghai -1.1%, Sensex -1.1%

The major Asian indices closed lower as Japan continues to try and prevent a nuclear meltdown at the Fukushima Daiichi facility. Dollar/yen plunged to a record low 76.42 before recovering some of its losses. The Reserve Bank of India hiked both its repurchase rate and reverse repurchase rate 25 bps to 6.75% and 5.75% respectively. The hikes were widely expected as the RBI continues to deal with rising inflation. China announced a suspension of approvals for new nuclear power plants. Looking at the currencies...the yuan settled weaker at 6.5753 while dollar/yen is trading 78.88.

In Japan, the Nikkei closed -1.4% with exporters Cannon (-3.3%) and Toyota (2.2%) seeing weakness. Tokyo Electric Power, the operator of the troubled Fukushima Daiichi facility plunged another 13% and is down 62% for the week.

In Hong Kong, the Hang Seng finished -1.8% on weakness in technology which occurred following internet gaming co Tencent Holdings announcing a weaker-than-expected fourth quarter net profit.

In China, the Shanghai Composite settled -1.1% with nuclear-related shares seeing heavy losses. Nanfang Ventiliator, a co that supplies nuclear plants in China with ventilation systems, plunged the daily allowance of 10% while Dongfang Electric fell 7.6%.

In India, the Sensex closed -1.1% as financials (-0.8%) traded lower following the RBI's interest rate hikes. ICICI Bank and HDFC Bank were among the biggest decliners.

• European Markets Closing Prices
-UK's FTSE: +1.8%
-Germany's DAX: +2.2%
-France's CAC: +2.4%
-Spain's IBEX: +2.3%
-Portugal's PSI: -0.3%

Market Internals for Thursday 17 March, 2011 AMC NYSE :

Higher than avg volume @ 1035 mln, vs. 1033 mln

Advancers outpaced Decliners (adv/dec): 2198/806

New lows outpaced new highs (hi/lo): 43/48NASDAQ :

Higher than avg volume @ 1994 mln, vs. 1810 mln

Advancers outpaced Decliners (adv/dec): 1569/1002

New lows outpaced new highs (hi/lo): 43/106

Commodities AMC on Thursday 17 March, 2011:
Light Crude (NYMEX) April 11 ($US per bbl.) : 101.42 (+3.44 +3.51%)
Gold (NYMEX) April 11 ($US per Troy oz.) : 1,404.20 (+8.10 +0.58%)



Treasury Yields AMC on Thursday 17 March, 2011:
• 2 Year Note 0.60% +0.02
• 5 Year Note 1.91% +0.04
• 10 Year Note 3.25% +0.03
• 30 Year Bond 4.42% +0.04 2/30 Spread : 382bps (+2) ... 2/10 Spread : 265bps (+1)



No economic reports out tonight.