Today's Morning Report

U.S. Overnight Market Commentary 

U.S. markets were closed overnight

Europe’s Overnight Market Commentary

European shares gave up early gains in morning trade after their worst week in over a month as data on the UK service and euro zone retail sectors disappointed, and worries over stress tests on banks hurt financials. The market was choppy on Monday due to lower volumes as many investors avoided taking big positions due to a holiday in the United States. Volumes on the FTSEurofirst 300 index of top European shares was about 10% of the index's 90-day average in the first two hours of trading. At 0907 GMT, the index was flat at 969.76 points after hovering in a range of 967.89 to 975.28. It closed 0.1% higher in the previous session and posted its worst weekly performance since May 21. Poor economic numbers also put pressure on the market. Britain's services sector expanded at its slowest rate for 10 months in June, while euro zone retail sales rose less than forecast in May. Banks were among the top losers, with Barclays, Lloyds, Royal Bank of Scotland and Credit Agricole down 0.9% to 1.6%. "There is a certain amount of scepticism that the stress tests (on banks) will do anything because it will be either fudged or the complete results won't be published. What we need is clarity," said Felicity Smith, fund manager at Bedlam Asset Management. "There is a feeling that the second quarter this year will mark a temporary peak in the rate of economic growth." French Economy Minister Christine Lagarde said on Sunday the stress-test results, to be published on July 23, will show that "banks in Europe are solid and healthy". Europe's banking watchdogs have been running the tests to boost confidence in the sector as it emerges from the financial crisis to face mounting pressure from tighter capital requirements, extra taxes and additional regulation. While some analysts have said the stress tests should restore confidence in the sector and lead to a recapitalisation of weaker banks, others have said the exact criteria of the sovereign stress needs to be disclosed if the tests are to convince the market. Retailers, generally seen as defensive stocks, were in demand. Carrefour, Marks & Spencer and Tesco rose 0.3% to 2.4%.

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Hanuman Investments Pty Limited trading as Hanuman Private Wealth - AFSL No. 313416

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