10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – The Fed lowered its key rate by 0.25% to 2% and signaled that more rate cuts may not come in the near future. The Bank of Japan left its rate unchanged at 0.5%. China crude oil and other derivates consumption surged in the first quarter.

Global Markets Update

The Fed decided today to lower its target for the federal funds rate 25 basis points to 2% and signaled that future rate cuts may not be necessary. Two members of the 10 people who voted for the decision dissented. The Fed also indicated that seven month cycle of rate cut may be enough to bring moderate economic growth.

U.S. stocks edged higher in the morning on the release of first quarter GDP data. The economy in the quarter rose at annual rate of 0.6%, same rate as in the fourth quarter of 2007. Higher investment in inventory contributed to the mild gain. Citigroup revised its stock offering plan to $4.5 billion from $3 billion. General Motors reported narrower than expected loss. Procter & Gamble earnings rose 8% on rising demand in China, India and Latin America. Stocks closed lower. General Motors led the gainers in indexes and Citigroup and Unisys led decliners in the indexes.

UK consumer confidence falls to the lowest level in the last sixteen years on worries related to general economic conditions and weak housing market. Nationwide Building Society reported today that U.K house prices declined 1% to £178,555 in April from a year earlier as the credit crunch affect new home purchases. The mortgage lender also forecasts prices may decline as much as 5% this year. Home Retail Group led advancers in the FTSE 100 index shares with a rise of 8.75%.

Stocks in India closed lower ahead of the rate decision in the U.S. The U.S. Fed lowered its key rate by 0.25% to 2% and signaled that future cuts may not be necessary. Reliance Communication earnings surged 71% on 32% rise sales. HDFC declined after it reported 40% rise in income on 33% rise in revenue. Nestle India earnings gained 48% and Videocon Industries profit gained 8%.

Hong Kong retail sales in March surge 20% and in the first quarter rose 17%, lifted by a 29% surge in auto related sales. Separately China reported crude oil consumption in the first quarter rose 8% to 91.8 million tons and consumption of petrol, diesel and kerosene rose 16.5%. Crude oil production in China rose only 2.2%.

The Bank of Japan left its key rate unchanged at 0.5% as economy continues to remain sluggish. Inflationary pressures are on the rise but retail sales remain weak. Japan, in a near 11 year economic slump is now facing inflation from the outside world as commodities and food prices rise. March industrial production declined compared to February and from a year ago. Production is likely to fall further in April. Matsushita surged 14% after it forecasted 10% rise in the current year profit.

European Markets indexes

In London FTSE 100 Index closed lower 2.10 or 0.03% to 6,087.30, in Paris CAC 40 Index increased 19.44 or 0.39% to close at 4,996.54 and in Frankfurt DAX index higher 63.48 or 0.92% to close at 6,948.82. In Zurich trading SMI increased 67.00 or 0.90% to close at 7,529.00.

North American Markets indexes

Dow Jones Industrial Average fell 11.81 or 0.09% to a close of 12,820.13, S&P 500 closed down 5.36 or 0.39% to 1,385.58, and Nasdaq Composite Index decreased 13.30 or 0.55% to close at 2,412.80. In Toronto TSX Composite closed up 119.99 or 0.87% to 13,945.60.

Of the 30 stocks in Dow Jones Industrial Average, 14 closed higher, 16 closed lower, and none was unchanged.

Citigroup led decliners in the Dow Jones Index with a loss of 4% followed by declines in Hewlett Packard of 3.11%, in Home Depot of 1.9% and in AIG of 1.7%.

General Motors led gainers in the Dow Jones index with a rise of 9.4% followed by gains in Merck of 2.4%, in Procter & Gamble of 1.75% and Chevron and Exxon of 1.4%.

Of the stocks in S&P 500 index, 165 stocks increased, 327 declined, and 8 were unchanged. Of the stocks in the index, 50 stocks fell more than 3% and 13 gained more than 3%.

Unisys led decliners in the S&P 500 index with a loss of 12.4% followed by losses in OfficeMax of 9.6%, in MEMC Electrical of 9.2%, in Lennar Corp of 9% and in Sealed Air of 8%. General Motors led gainers in the S&P 500 index with a rise of 9.4% followed by gains in Cummins of 9%, in Interpublic group of 5.8%, in Ambac Financial of 5.7% and in Jones Apparel of 5.5%.

South American Markets Indexes

Brazil closed at a record high and led gainers in the South American trading with a rise of 6.34% followed by increases in Colombia of 1.61%, in Argentina of 1.2%, and in Chile of 0.98%. Mexico added 0.04% and Venezuela rose 0.9%.
Peru, the only decliner fell 0.1%.

Bovespa surged 4,042.70 or 6.4% after S&P increased Brazil rating to investment grade. Of the 63 member stocks in the Bovespa index, 62 gained and 1 fell. CCR led the gainers in the index with a surge of 4.4% followed by a rise of more than 13% in Lojas Renner, Cyrela, and Gafisa. Nine stocks in the index gained more than 10%.