Online Stockmarket Trading Update

US markets closed flat after a sell-off late in the session.  US stocks initially rose on a round of corporate deals and expectations that the Bush tax cut package will pass the Senate.  European markets closed higher overnight for a sixth consecutive session, led by the mining sector. Asian markets also ended higher, as Chinese and Hong Kong stocks rose after the Chinese government resisted imposing another interest rate.  Commodities prices were higher.

In the ASX M&A activity continues to drive specific stocks. The financial sector provided most of the market’s strength yesterday as investors were relieved by the benign nature of regulatory reforms announced by the Australian government over the weekend, and the Aussie dollar is back close to US dollar parity.

The SPI Futures is above its key weekly pivot level of 4700, closing up 0.3% (or 12 pts) at 4,771.  With generally positive leads from overseas markets the ASX is set to open higher today, with the key levels for our index being 4880 and 4700. Look to resource and banking stocks to be the focus.

US Markets

US markets closed flat after a sell-off late in the session.  Stocks initially rose on a round of corporate deals, and expectations that the Bush tax cut package will pass the Senate.  If passed the $US900 billion package will extend tax cuts passed during the Bush administration for all income levels for another 2 years, and will also extend unemployment benefits through next year. 

The corporate deals announced included General Electric Co’s $US1.3 billion acquisition of British oilfield company Wellstream Holdings PLC and Dell Inc’s $US960 million purchase of network storage company Compellent Technologies Inc.  The Nasdaq index is taking a breather after closing at new annual highs for the past 8 days.  Any gains were led by the energy sector (up 1.1%) and the materials sector (up 0.7%), while consumer staples lagged (down 0.3%).  The Dow closed marginally higher, up 0.2% (or 18 points) at 11,429, while in the broader market the S&P 500 index was flat at 1,240 and the tech-heavy Nasdaq ended down -0.5% (or -13 points) at 2,625.

European Markets

European markets closed higher overnight.  European stocks rose for a sixth consecutive session overnight, led by the mining sector which has benefited from the Chinese decision not to hike interest rates, and by takeover activity involving the energy and pharmaceutical industries.  EU leaders will meet in Brussels on the 16th and 17th of December to discuss the implementation of a permanent mechanism to shore up the debt laiden PIIGS economies, as the ECB tries to implement plans that will convince investors that they are well placed to take more action to reduce sovereign debt concerns. 

The Stoxx Europe 600 index (up 1.9% last week), closed at its highest level in more than two years.  German markets continue to outperform up for a second straight session, up 18 percent for 2010. Automakers and steelmakers led the gains there.  In London the FTSE 100 index closed up 0.8% (or 48 points) at 5,861, the German DAX was up 0.3% (or 23 points) at 7,029, while in France the CAC was up 0.9% (or 36 points) at 3,912.

Asian Markets

Asian markets ended higher yesterday.  Chinese and Hong Kong stocks rose after the Chinese government resisted imposing an interest rate increase in response to consumer price index figures.  Government data released Saturday showed the CPI rose 5.1% in November from a year earlier (up from 4.4% in October) and the fastest rise since July 2008.  Shares in Chinese banks rose as the Chinese government raised the bank reserve requirement ratio by 0.5 percentage point to 18.5%, avoiding harsher tightening measures for the time being at least.  Oil explorers rose sharply as a new government 5-year plan, which takes effect in 2011, will include detailed plans to support the sector. 

In Japan the market reached a fresh 7-month closing high, while technology exporters were again helped by the weaker yen. Steelmakers were among the best performers, with Nippon Steel up 2.7% and JFE Holdings up 3.3% after an upgrade from J.P. Morgan, citing a cyclical market recovery.  Heavy equipment manufacturers also rose: Komatsu was up 1.4% and Hitachi Construction Machinery rose 1.0%. Honda Motor closed up 1.1% after reporting the firm will aim to increase annual worldwide automobile sales by 80% over the next decade, also targeting low-priced vehicles in emerging markets.  In China the SSE Composite closed up 2.9% (or 82 points) at 2,923, while in Hong Kong the Hang Seng Index was up 0.7% (or 155 points) at 23,318 and in Japan the Nikkei 225 Index was up 0.8% (or 82 points) at 10,294.

Commodities

Copper remained around record levels again, on continuing concerns that demand will outpace supply into 2011, driving prices higher.  Gold is higher but still below $US1,400 an ounce, while crude oil rose as well. The Dollar Index was down -0.9% at 79.34 on the higher Euro, while the Australian Dollar last traded higher at 99.48.  Commodities were generally higher.

Benchmark crude NYMEX for December delivery was up 0.5% (or $US0.46) to settle at $US88.25. Copper prices backed off 2-year highs, with copper for December delivery up 2.3% (or 9.6 cents) at $US4.2005. Gold prices were off all-time highs again, with December gold up 0.6% at $US1,393.00.

Key International News Drivers Today

Tags: ASX News, BHP Billiton, Business News, Crude Oil, European Markets, gold, Stock Market Analysis, stockmarket, trading, US Market wrap

This entry was posted on Tuesday, December 14th, 2010 at 9:05 am and is filed under Morning Wrap, Stock Market Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.