US markets ended mixed, hovering around 2-year highs after trading in a narrow range, and with thin trading volumes. Investors saw little reason to change their positions heading into the holiday. European stocks drifted lower overnight, in thin trading for the last full trading session before the Christmas holiday. Asian markets ended lower yesterday, with the Japanese market closed for a public holiday, and the financial sector weighing in China and Hong Kong as the government is reportedly set to increase the provisioning requirements on local government financing. Commodities prices were mixed.
The SPI Futures is above its key weekly pivot level of 4700, closing down 0.4% (or -20 pts) at 4,793. The key levels for our index today are 4820 and 4760. M&A activity continues to drive specific stocks. The ASX is set to open flat, as we had subdued leads from overseas markets. Don’t forget today is a shortened trading session.
US Markets
US markets ended mixed, hovering around 2-year highs after trading in a narrow range, and with thin trading volumes. Investors saw little reason to change their positions heading into the holiday, with economic data offering few surprises. Durable-goods orders fell more than expected, with key indicators for capital spending showing businesses are spending as the economy recovers, and with new orders for nondefense capital goods (excluding aircraft) rising 2.6%. The Reuters/University of Michigan consumer sentiment final reading for December edged higher, in line with expectations, while US consumer spending was modest in November with a 0.4% increase. The data confirms a slow but steady US recovery. The outstanding performing sectors were Materials (up 0.4%), and Energy (up 0.2%), while Financials weighed down -0.8%.
The Dow closed up 0.1% (or 14 points) at 11,573 while in the broader market the S&P 500 index was down -0.1% (or 2 points) at 1,257 and the tech-heavy Nasdaq ended down -0.2% (or 6 points) at 2,662.
European Markets
European stocks drifted lower overnight, with thin trading volumes in the last full trading session before the Christmas holiday. The Stoxx Europe 600 index was flat at 281.76, its highest finish in more than two years. In London, the FTSE 100 index touched the 6,000 mark for the first time since June 2008, and finished just below this watermark. Energy stocks led the gains after crude oil settled above $US90 a barrel in the US for the first time since October 2008. In Germany, the market was flat. In Ireland the market index fell 0.3%, as the goverment took control of the troubled back Allied Irish Banks.
In London the FTSE 100 index closed up 0.2% (or 12 pts) at 5,996, the German DAX was down 0.1% (or -10 pts) at 7,057, while in France the CAC was down 0.2% (or -8 pts) at 3,932.
Asian Markets
Asian markets ended lower yesterday. Japanese markets were closed for a public holiday. In China, property developers weighed on the market after the Ministry of Commerce directed its local branches to strengthen the review process for foreign investment in real estate in an attempt to curtail the effects of speculative capital inflows on already high asset prices. Banks weighed again on Hong Kong and Chinese markets after reports that China will likely increase the provisioning requirements on local government financing, by setting lending quotas for banks based on their capital adequacy ratio, liquidity conditions, provisions for bad loans and loan-to-deposit ratio, rather than setting an annual loan quota for the country’s banking sector.
In China the SSE Composite closed down 0.8% (or -22 points) at 2,855, while in Hong Kong the Hang Seng Index was up 0.6% (or -142 points) at 22,902 and in Japan the Nikkei 225 Index closed at 10,346.
Commodities
Copper remained around record levels again, on continuing concerns that demand will outpace supply into 2011 driving prices higher. Gold was higher, still below $US1,400 an ounce. The Dollar Index was down -0.3% at 80.42 on the higher Euro, while the Australian Dollar last traded at 99.85. Commodities were generally mixed.
Benchmark crude NYMEX for December delivery was up 1.0% (or $US0.94) to settle at $US91.42. Copper prices backed off around 2-year highs. Copper for December delivery was down -0.4% (or -1.7 cents) at $US4.2500. Gold prices were off all-time highs again, with December gold down -0.5% (or -$6.80) at $US1,379.80.
Key International News Drivers Today
CHINA – the government is set to increase the provisioning requirements on local government financing. China prospect of implementing further tigthening measures.
|
Market |
Movement |
|
The Dow Jones Industrial Average |
Up 0.1% (or 14 pts) at 11,573 |
|
The S&P 500 |
Down -0.1% (or 2 pts) at 1,257 |
|
The Nasdaq |
Down -0.2% (or 6 pts) at 2,662 |
|
|
|
|
The FTSE 100 |
Up 0.2% (or 12 pts) at 5,996 |
|
The German DAX |
Down 0.1% (or -10 pts) at 7,057 |
|
The French CAC |
Down 0.2% (or -8 pts) at 3,932 |
|
|
|
|
The Dollar Index |
Down -0.3% at 80.42 |
|
The Australian Dollar |
Last traded at 99.85 |
|
The Commodities Index |
Up 0.4% at 329.38 |
|
|
|
|
Crude Oil Futures |
Up 1.0% at $91.42 |
|
Gold Futures |
Down -0.5% at $1,379.80 |
|
Copper Futures |
Down -0.4% at $4.2500 |
|
SPI Futures |
Down -0.4% (or 20 pts) at 4,792 |
|
|
|
|
|
|
|
Market |
Movement |
|
SSE Composite (China) |
Down 0.8% at 2,855 |
|
Hang Seng Index (Hong Kong) |
Down 0.2% at 22,902 |
|
Nikkei 225 Index (Japan) |
Closed at 10,346 |
AUN- Austar United Communications, the regional pay-tv provider, plans to return $200 million to shareholders, following the extension of the bulk of a senior debt facility for five years.
BLD- Building materials supplier Boral will acquire a North American stone veneer supplier, Owens Corning Masonry Products LLC (Cultured Stone), for a minimum $US90 million.
FGL- Fosters, through its Carlton & United Breweries and Carlsberg Group, have extended a long-term exclusive licence to sell the Danish brewer’s brands in Australia.
HVN- A report from the Retailers Association (NRA) says apparel and electronic goods are selling “poorly” at the check-outs this year, while the traditional festive season favourites – sporting goods, toys and cosmetics – are popular.
GXY- Galaxy Resources shareholders have approved the lithium producer’s plan to raise $US260 million via a listing on the Hong Kong Stock Exchange.
RIV- Rio Tinto has raised its bid to $3.9 billion (over $16/share) and has now secured the backing of takeover target Riversdale Mining.
SEK- Seek, the online jobs website, will take a majority stake in a Hong Kong-based business and create a new Asian subsidiary.
TLS- Telstra expects to record an $138 million impairment charge against the carrying value of its Octave business in China.
TOL- Toll Holdings, the logistics provider, has cut its holding in a Shenzhen property developer while buying an Australian poultry transport business.
WEC- White Energy will proceed with the $500 million acquisition of Cascade Coal Pty Ltd, the owner of the Mt Penny Coal Project in the central west of NSW.
WES- retailer Coles has forecast a “bumper” Christmas trading period, Coles Express says they are “gearing up for our biggest Christmas trading period ever – and have allocated extra stock in key areas” in NSW.
ASX – to open flat
US & UK/Europe – Flat
Head of Research
