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15July Sep 2011 12 19 Sep 2013 2011 Stocks Gain on Stimulus Optimism Stocks rallied globally after the Federal Reserve said it would keep its stimulus package in place for some time to come. Performance of major US stock market indices Index 1-day Performance Standard and Poor's 500 +1.36% Dow Jones Industrial Average +1.11% NASDAQ Composite +1.63% Source: Bloomberg Index close 1,675 15,461 3,578 US markets Stocks responded to the Federal Reserve’s minutes of its last FOMC meeting and chairman Ben Bernanke’s comments late Wednesday and soared. His remarks energised investors across the globe and sent US stock indexes to all-time highs. Bernanke said that the economy still needs "highly accommodative monetary policy for the foreseeable future." The chairman allayed investor concerns by affirming that accommodative monetary policies would remain in place even if the Fed begins to draw down its bond buying. In short, investors finally realised that tapering is not tightening. The Dow Jones industrials were up 1.1%, the S&P gained 1.4% and the Nasdaq was 1.6% higher. Costco gained after it reported same store sales rose, beating estimates. Rockwell Medical was up after a drug used for treating kidney disease performed well in a study. Yum Brands declined after the company reported that second quarter adjusted earnings were down from a year ago, though they still beat analysts' estimates. Advanced Micro Devices jumped on a broker upgrade. Celgene was up after the company said a late stage trial of a cancer drug met the main goal of improving survival in newly diagnosed blood cancer patients. Microsoft advanced after the company announced a reorganisation designed to streamline the software company's operations. RadioShack plunged after trade publication Debtwire reported the electronics chain is considering hiring a financial adviser to help fix its balance sheet. Earnings reports are expected on Friday from JPMorgan and Wells Fargo. Housing stocks including DR Horton and Lennar advanced. Mechel also advanced. Among the other stocks that rallied were biotechnology, networking, commercial real estate and software. 1 To know more, visit www.fidelity.com.hk FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide Investment. Fidelity only gives information about its products and services. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and the F symbol are trademarks of FIL Limited. 15 Sep 2011 19 Sep 2011 Gold at the afternoon London fixing was up US$29.00 to US$1,285.00. Copper futures were up 2.9% to US$3.18. WTI spot crude was down US$1.90 to US$104.62. Dated Brent spot crude was down US$1.00 to US$107.51. The US dollar fell against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.5%. The yield on US Treasury 30-year bond was down 7 basis points to 3.62% while the yield on the 10-year note declined 10 basis points to 2.57%. Performance of major European stock market indices Index 1-day Performance Stoxx 600 Index +0.58% FTSE 100 +0.59% DAX +1.14% CAC 40 +0.74% Source: Bloomberg Index close 297 6,543 8,159 3,869 European markets Shares rebounded from Wednesday’s losses and finished solidly in positive territory. Optimism was sparked by Fed Chairman Ben Bernanke’s comments late Wednesday. He eased investor concerns over tapering of Fed stimulus by reiterating his stance to maintain monetary policy. The FTSE was up 0.6%, the CAC gained 0.7%, the DAX advanced 1.4% and the SMI was 0.2% higher. European Central Bank Governing Council member and Germany’s Bundesbank’s President, Jens Weidmann said Thursday that the ECB’s forward guidance on low interest rates will not deter it from increasing interest rates if inflationary pressures emerge. The ECB's introduction of the forward guidance last week was justified by the current inflation outlook, Weidmann said in a speech in Munich. In economic news, the unemployment rate in Greece rose to a new record high in April of 26.9% from 26.8% in March and 26.6% in February. Commerzbank and Deutsche Bank advanced. Hugo Boss was up on a broker upgrade as was Gagfa. Suedzucker declined after reporting lower profit for the first quarter. Renault was down on a broker downgrade. In London, Fresnillo, Vedanta Resources and Randgold Resources gained along with Anglo American, Rio Tinto and BHP Billiton. Associated British Foods advanced after reporting higher third quarter revenues. G4S dropped after the Serious Fraud Office was asked to investigate the company for overcharging the British government. Serco Group also sank due to suspected overcharging. Balfour Beatty gained after the company said it expects full year results to remain in line with management's expectations. 2 To know more, visit www.fidelity.com.hk FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide Investment. Fidelity only gives information about its products and services. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and the F symbol are trademarks of FIL Limited. 15 Sep 2011 19 Sep 2011 Performance of major Asia Pacific stock markets Index 1-day Performance Index close Asia MSCI AC Asia Pacific ex Japan +2.56% 440 Japan Nikkei 225 +0.39% 14,473 Hong Kong Hang Seng +2.55% 21,437 China Shanghai SE +3.23% 2,073 Taiwan Taiwan TAIEX +2.10% 8,180 Korea KOSPI +2.93% 1,878 Australia S&P/ASX200 +1.31% 4,966 India SENSEX 30 +1.98% 19,676 Singapore Straits Times +1.91% 3,249 Malaysia Kuala Lumpur Comp +0.70% 1,781 Thailand Stock Exchange Index +4.22% 1,447 Indonesia Jakarta Comp +2.80% 4,604 Philippines Philippine SE +1.57% 6,407 Source: Bloomberg Asia Pacific Markets Stocks here advanced with a weaker US dollar and higher metal prices supporting sentiment after Federal Reserve Chairman Ben Bernanke ended weeks of speculation by saying the Fed will maintain its current pace of bond buying for the foreseeable future because of weak job growth and low inflation. The Nikkei was up 0.4% with a strong yen capping gains after the Bank of Japan upgraded its assessment of the economy, saying the economy is "starting to recover moderately." The BoJ left its policy unchanged and affirmed its optimistic outlook, citing rising exports and improvement in consumer sentiment. Exporters were mixed with Fanuc and Daikin Industries advancing while Canon and Nikon retreated. Olympus advanced 3.2% on a brokerage upgrade. SoftBank declined after US wireless carrier Sprint Nextel wrapped up its US$21.6 billion deal with the Japanese mobile carrier. The Shanghai Composite rallied 3.2% led by financials on continued speculation that the government may ease policy to help stabilise growth. Property developers and construction firms also gained sharply following reports that financing rules may be relaxed for real estate firms, subject to certain conditions. The Hang Seng jumped 2.6%. The Kospi jumped 2.9% to a three week high. The Bank of Korea kept its key interest rate unchanged at 2.5% for a second month. The BoK raised its economic growth forecast for this year by 0.2 percentage points to 2.8%. Both the S&P/ASX and All Ordinaries were up 1.3% with miners and banks leading the way after Bernanke reiterated the need for monetary policy accommodation to foster a lasting recovery. Employment defied forecasts and was up 10,300 in contrast to unchanged expectations. However, the unemployment rate climbed to 5.7% — its highest level since 2009 amid a marked increase in the number of people looking for full time jobs. 3 To know more, visit www.fidelity.com.hk FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide Investment. Fidelity only gives information about its products and services. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and the F symbol are trademarks of FIL Limited. 15 Sep 2011 19 Sep 2011 Today in Business and Finance May home loans in Australia will be released. India releases May industrial production and June consumer price index. The Eurozone posts May industrial production. The US releases June producer prices and July preliminary consumer sentiment. Bond markets 10-year Government Bond Futures US UK Germany Japan Australia Source: Bloomberg Closing Yield +2.57% +2.38% +1.62% +0.83% +3.74% Change -0.05% -0.04% -0.04% -0.03% -0.10% Commodity Crude oil 1-month futures Spot Gold Thompson-Reuters/Jeffries Commodity Index Source: Bloomberg Close $104.91 $1,286.20 286.17 Change -1.51% +2.10% +0.18% Currency Japanese yen Australian dollar Euro British pound Canadian dollar Source: Bloomberg Close 98.96 0.9188 1.3097 1.5184 0.9647 Change +0.73% +0.17% +0.92% +1.13% -0.94% Commodities and currencies 4 To know more, visit www.fidelity.com.hk FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide Investment. Fidelity only gives information about its products and services. Any person considering an investment should seek independent advice on the suitability or otherwise of the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and the F symbol are trademarks of FIL Limited.