* US stock markets finished flat after paring early losses, as the surprising Chinese data dragged on stocks, but domestic data again trumped sentiment, on the back of better-than-expected jobs data. Traders kept a wary eye on developments in the Ukraine.
* European stock markets sold down for a second session, after recording their first weekly fall since January, as geopolitical tensions over Crimea escalated and the disappointing Chinese data hit the miners.
* Asian stock markets sold down sharply yesterday in reaction to the disappointing Chinese trade data. Expect a weak start again today.
* Commodities prices mixed, Gold prices rose at $US1,340, while crude-oil traded fell to $US101.
* The miners are likely to weigh again, after disappointing data out of China, which sent iron ore prices lower and copper prices plunging for its biggest fall in two years, down to their lowest levels since July.
The Australian stock market finished -1.1% lower at 5411 yesterday, backing off five and a half year highs. The ASX market is looking to open lower again today, with the 5420 level key near-term for the ASX200, as markets across Europe slumped and in the US backed off key levels. The miners are likely to weigh again, after disappointing data out of China, which sent copper prices plunging for its biggest fall in two years, down to their lowest levels since July. Iron ore prices has plunged the most in over four years to six month lows and are now in bear market territory; prices plummeted to $US105/tonne, as Chinese steel manufacturers are cutting production, with steel futures prices hitting record lows, due to slowing demand and concerns over access to credit. The Aussie iron ore miners are speaking at a conference today.
The SPI 200 futures are flat at 5421, giving subdued lead for the ASX market today. The Australian dollar eased to US90.2c.
US stock markets finished flat after paring early losses, as the surprising Chinese data dragged on stocks, but domestic data again trumped sentiment, on the back of better-than-expected jobs data. Traders kept a wary eye on developments in the Ukraine.
The three benchmark indexes finished flat for the session, easing off new record highs. Last the week the S&P500 hit new all-time highs up 1.0%, the Dow Jones rose 0.8% and the Nasdaq backed off 14 year highs. Six of the ten S&P500 sectors finished lower for the session, with the falls dominated by the Industrials, Tech and Consumer Discretionary sectors down over -0.3%, while the Healthcare sector rose 0.4% and the Financials sector edged 0.1% higher, closing at its highest level since September 2008.
The anniversary of the five year bull market, which began in March 2009, has seen the S&P500 rise 178% and the gains have been led by the Consumer Discretionary sector up 423%, with the gambling and hotel sub sector leading the way, with Las Vegas Sands up 6,120% and MGM and WYNNS up 1,130%.
For the session Dow Jones close down -0.2% at 16,418, the S&P500 close down -0.1% at 1,877 and the NASDAQ closed down -0.1% at 4,334, while on 10-year Treasury notes eased to 2.78%.
European stock markets sold down for a second session, after recording their first weekly fall since January, as geopolitical tensions over Crimea escalated and the disappointing Chinese data hit the miners.
The Europe Stoxx 600 finished down -0.5% for the session, paring early losses, with trading volumes holding at over 35% above the monthly average. The bears stepped in as geopolitical tensions escalated, when the Russia built on its presence in Crimea and focused on the miners after the disappointing data out of China.
Across the region nine of the ten sectors finished in the red, as the Utilities sector finished up 0.2%, as the rest of the sectors down over -0.5%, with the largest session falls happening in the Materials and Communications sectors down -1.4%, followed by the Tech sector down -0.8%.
The German market sold off again with the selling broad based, after the index slumped -3.5% last week, recording its biggest weekly fall since January. The London market continued lower after falling -1.4% last week, its biggest weekly decline since January, due to geopolitical concerns, with the falls led by the miners.
For the session the German DAX 30 close down -0.9% at 9,265, the UK the FTSE 100 closed down -0.4% at 6,689, the French CAC 40 closed up 0.1% at 4,370, while the Spanish market close up 0.3% at 10,194.
Asian stock markets sold down sharply yesterday in reaction to the disappointing Chinese trade data. Expect a weak start again today.
The MSCI Pacific Index fell -1.5%, for the session, backing off its highest close since mid-January. The index is still up 6% from its February lows. Miners weighed in response to the Chinese data.
In China, the Shenzhen Composite sold off sharply to a five year low, as investors digested the weekend data, showed Chinese exports surprisingly fell -18% YoY, a six sigma miss and its largest trade balance miss on record and its second largest deficit on record. Traders were also reacting to China’s first onshore corporate bond default, with Shanghai Chario Solar saying it is unable to make its $US14.6 million interest payment due last Friday. The Hong Kong market fell, as concerns rose over the Chinese financial system ability to sustain economic growth.
The Japanese market fell for the first time in a week, after finishing up 2.1% last week. The index is still trading above psychological 15,000 level, but the data that showed the economy expanded less than forecast with GDP running at an annualised 0.7% for the quarter (below the 1% forecast) and the current account deficit widened. The data prompted calls for Japan to reopen its nuclear reactors, in a move to reduce the energy costs for the nation.
For the session the Shenzhen Composite closed down -3.3% at 2,097, the Hong Kong Hang Seng closed down -1.8% at 22,264, and the Japanese Nikkei down -1.0% at 15,120, while the South Korean KOSPI closed down -1.0% at 1,954.
The Dollar Index was higher 79.74 on a lower Euro, and the Aussie Dollar lower to US90.2c. Commodities prices lower.
Overnight the COMEX WTI Crude for FEB13 delivery closed down -1.5% at $US101.00, the COMEX Copper for FEB13 delivery closed down -1.2% at 3.047, the COMEX Gold for FEB13 delivery closed up 0.1% at $US1,340.10.
ASB – Austal the shipbuilder, has won a $US125 million contract to build two vessels for an unidentified naval customer in the Middle East.
LEI – Germany’s Hochtief has moved to boost its stake in construction giant Leighton Holdings and shake up the company’s board. The majority shareholder Hochtief’s bid to lift its stake from 58.7% to 74.2% via a proportional bid for 3 of every 8 shares held by other shareholders will give them more than just the chance to cash in at a 6.9% premium of A$22.15 a share plus dividends.
QAN – RBA governor Glenn Stevens has played down comparisons between the government debt guarantee sought by Qantas and the one given to the big four banks during the Global Financial Crisis (GFC).
RIO – Rio Tinto is in talks with Swiss mining giant Glencore Xstrata regarding a JV deal to streamline the two company’s struggling NSW Hunter Valley coal assets.
WCL – Westside the Queensland coal seam gas explorer Westside has received a $160 million takeover offer from a Chinese firm.
WES – Wesfarmers is investigating floating its insurance broking business in a potential $1 billion-plus deal.
ASX –open lower
US & UK/Europe – EU lower, US flat
US ADRs – Broadly lower!…
ANZ -1.1%, NAB -0.9%, NWS -0.3%
AWC -6.3%, BHP -2.7%, RIO -1.9%, NEM -1.2%
By Michael Hevern
D2MX Investment Advisor
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