* US stock markets eased overnight.
* European stock markets ended lower overnight, as the Greek negotiations continue, as the Greek market plunged -5.5%.
* Many Asian stock markets remain closed for the Lunar New Year holidays.
* Commodities prices traded mostly lower, as Gold prices lower to around $US1,668 and while crude-oil closed up around $US100.
The SPI Futures is trading above the key pivot level of 4180, ended up 0.1% (or 4 points) at 4,196. The key levels for our index today are 4150 to 4230.
Yesterday Australian shares have held on to recent gains, as we had early expiry for equities options. The energy and gold sectors provided some support for the market on the back of rising commodities prices overnight. Crude-oil traded back above $US100, after news that the European Union (EU) had placed an embargo on Iranian exports, gold also traded around 5-month highs.Financials rose in overseas markets overnight, due to increasing confidence that talks to restructure Greece’s debt were progressing and reports that France and Germany were calling for a relaxation of global bank capital rules. Shares in the All Ordinaries (XAO) traded flat today, as the index closed flat at 4286, and as the S&P/ASX 200 (XJO) closed flat at 4224.
Aussie shares are expected to trade lower and after negative leads from the US and European markets.
See below for ASX listed companies in the news today.
* Nov Westpac-Melbourne Institute Indexes of Economic Activity Leading Index
* Jan DEEWR Vacancy Report
* Q4 CPI Data.
US Markets
US stock markets eased overnight. The Dow Jones Industrial Index posted its second consecutive decline for the first time in three weeks, but remains up 3.8% from the start of the year. In the broader market the S&P 500 closed in the red for the first time in a week, while the Nasdaq finished modestly higher. The VIX is below 20 indicating investors are comfortable with this steady melt up of markets.
Investors showed caution as Greece’s debt-reduction talks are yet to be resolved. In corporate news McDonald’s 4Q earnings rose 11% as the fast food company beat expectations; DuPont was flat after the diversified manufacturer’s 4Q earnings beat estimates; Johnson & Johnson finished flat after the consumer-products company reported 4A earnings and revenue that exceeded expectations and Apple reported after market that fiscal 1Q first-quarter earnings more than doubled, as both profit and revenue hit record highs, led by strong sales of the iPhone and iPad.
In commodities prices were generally lower as oil futures edged lower, as traders reassessed the impact of the European Union’s ban on Iranian crude-oil imports, gold prices slipped and base metals closed mixed.
All ten company groups that make up the S&P index traded mixed with the Materials flat , Financials sector down -0.1%, Energy sector was down -0.3%, Industrials sector was up 0.1%, Technology was down -0.1%, while Consumer Staples were down -0.6%.
The Dow Jones closed down -0.3% (or -33 points) at 12,676, the S&P 500 index down -0.1% (or -1 points) at 1,314, the Nasdaq ended up 0.1% (or 2 points) at 2,786 and the smaller cap Russell 2000 was up 0.7%.
European Markets
European stock markets ended lower overnight, as the Greek negotiations continue. The Stoxx 600 index fell -0.4% down from from a 5-month high.
Across the region shares prices eased as Greece has yet to conclude debt talks with its private debt holders to write down the country’s debt by EUR100 billion. A resolution is crucial as Greece must repay EUR14.5 billion of maturing debt in March to avoid a default. The Greek market plunged -5.5%, due to the stalemate.
In London the FTSE 100 index closed down -0.5% (or -30 points) at 5752, the German DAX was down -0.3% (or -17 points) at 6,419 while in France the CAC was down -0.5% (or -16 points) at 3,322, Spain was down -0.3% and Italy ended up 0.1%.
Asian Markets
Many Asian stock markets are closed for the Lunar New Year holidays. Many regional markets, including those in Shanghai, Hong Kong and Seoul, were closed for Lunar New Year holidays.
Japanese stocks rose on the back of higher energy stocks as crude- oil futures hovered around $US100 per barrel, though trading volumes were light. The Bank of Japan kept interest rates on hold at near zero, noting that activity in the Japanese economy has flat due to a slowdown in overseas economies and appreciation of the yen.
In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was closed at 20,110 and in Japan the Nikkei 225 Index closed up 0.2% (or 19 points) at 8,785, South Korean KOSPI was closed for the session, while the Indian market up 1.5%.
Commodities
The Dollar Index was lower at 79.78 on a higher Euro, while the Australian Dollar last traded higher at 1.0491. Commodities prices traded mostly lower.
For the session the Benchmark crude NYMEX for January delivery was down -0.3% (or $US0.35) settle at $US99.24. Copper prices are seeking a support level as Copper for January delivery was up 0.5% (or 1.8 cents) at $US3.8125. January gold was down -0.8% (or $US13.80) at $US1,668.
ASX News Today
BBG – Billabong shares plunged today after surging due to recent speculation that the company could be the latest target from private equity buyers.
GUD – GUD Holdings the consumer and industrial products supplier, says trading conditions are expected to remain tough in the second half of the financial year, in the wake of a fall in profits in the first half.
LYC – Lynas shares remains in a trading halt, as the rare earths miner is seeking to finalize a funding deal, which analysts estimate to be up to $100 million. The halt comes a week before a meeting of Malaysia’s Atomic Energy Licensing Board, which is to decide whether to approve a temporary license for Lynas to commission a rare earths processing plant in central Malaysia.
NCM – Newcrest reported today it has a big year ahead, with two major expansion projects: the Cadia East project in New South Wales and the Lihir upgrade in PNG, which are set to be delivered in 2012 at costs beyond $1 billion each, weather permitting. The company has had to downgrade its annual gold production forecasts by 6 percent. Although on the current high gold prices, Newcrest is making more than $1000 of profit on each ounce of gold it produces, which helps cushion the fall in production. Newcrest plans to set up a secondary listing on the Toronto Stock Exchange and is on on track to launch this in the first quarter of 2012.
ORI – Orica says its restart of its ammonia plant near Newcastle has been put on hold for several weeks.
OSH – Oil Search shares jumped after the PNG-focused oil and gas producer reported a 26 percent rise in revenue for the year to December 31 to $US732.9 million thanks to higher oil prices and went on to forecast steady production in 2012. The rise in revenue was driven by a 45 percent increase in realised oil prices.
PNA – PanAust the copper and gold miner has forecast an increase in production from its major operation in Laos and a rise in earnings.
QAN – Qantas has enjoyed monopoly status in the corporate travel arena since the collapse of Ansett, but now with Virgin Australia’s introduction of eight cushy padded leather clad business class seats across each of its domestic fleet of Boeing 737s, Qantas will now face competition for business class passengers for the first time in a decade.
Ex-dividend Date
None
Market Summary
ASX – to open flat
US & UK/Europe – lower
Commodities Stock Index down -0.7%
Gold Stocks Index down -1.9%
Oil Stocks Index down -0.4%
US ADRs – Broadly Lower!!…
BHP down -0.9% & RIO down -0.5%; AWC down -3.5%
ANZ down -0.3% & NAB down -1.1%
NEM down -0.1%, JHX down 1.4%, NWS down -0.5%
By Michael Hevern
Head of Research
