* U.S. markets rose for a third consecutive week and closed at fresh 2-year highs.
* European markets closed mixed on Friday. The miners were among the biggest decliners.
* Asian markets finished the week higher. China’s central bank announced further tightening measures. The Japanese market hit a 9-month high.
* Commodities were generally higher. Gold has risen for a third straight week and silver reached 31-year highs.
The SPI Futures is trading above the key level of 4850, and closed down marginally -0.2% (or -12 pts) at 4,910. The key levels for our index this week are 4980 and 4830. M&A activity continues to drive specific stocks.
ASX trading is set to be subdued today, with the U.S. on holiday tonight. We will continue to focus on local earnings reporting this week, and we had mixed leads from overseas markets. Expect Materials stocks to weigh on the market, while Energy stocks will be in focus due to elevated oil prices, a consequence of the unrest in the Middle East. Investors need to monitor the tensions simmering in the Middle East and North African with unrest in Libya and Bahrain, and tensions between Iran and Israel over the Suez Canal.
See below for stocks in the news today.
U.S. Markets
U.S. markets rose for a third consecutive week and closed at fresh 2-year highs. The markets climbed despite escalating violence in the Middle East. The markets closed flat on the Friday session as investors were cautious ahead of its long holiday weekend (for the Presidents Day holiday).
There were no major economic releases in the session. The Dow Jones has notched up gains for 11 of the past 12 weeks. The S&P 500 had its highest close since June 2008, after hitting a 32-month high Thursday.
The U.S. market’s advance came despite China’s central bank announcing it will raise bank capital reserve requirements, increasing the ratio by 0.5 percentage points – the second increase this year. The materials sector – which gets much of its demand from China – was down, but the rest of the market shrugged it off.
The Dow closed up 0.2% (or 73 points) at 12,391, while in the broader market the S&P 500 index was up 0.2% (or 3 points) at 1,343 and the tech-heavy Nasdaq ended up marginally 0.1% (or 3 points) at 2,834.
Sectors that make up the S&P index were generally positive, with outperformers including Energy up 0.4% and Consumer Staples up 0.5%, and Industrials and Financials sectors up 0.2%, while the Materials sector fell 1.1%
European Markets
European markets closed mixed on Friday. The Stoxx Europe 600 index has rallied nearly 6% in 2011 (YTD) and was flat on Friday, backing off its highest close since last August 2008. The miners were among the biggest decliners in Europe, after further tightening measures from China and banks were hit by profit-taking after recent gains.
Investors spent the session wrestling with news of the continuing unrest and bloodshed in the Middle East, while China has raised the capital reserve requirements for its banks again and the leaders of the G20 major developed and developing nations also met in Paris for talks.
The FTSE is up 3.2 percent for the 2011 (YTD), and up 73 percent since March 2009, but the market fell on Friday, as mining stocks were among the biggest decliners, with BHP, RIO and Anglo American PLC all down over 2%. In Germanry the autos were under pressure because they are sensitive to growth expectations in China, which is a major market for sales.
In London the FTSE 100 index closed down 0.1% (or -4 points) at 6,087, the German DAX was up 0.3% (or 21 points) at 7,406, while in France the CAC was up 0.1% (up 5 points) at 4,157.
Asian Markets
Asian markets finished the week higher. China’s central bank announced on Friday it would again raise the capital reserve requirements of its banks in a further move to keep inflation under control in the world’s second biggest economy. This is the second increase this year, and is designed to withdraw excess liquidity from the economy and curb inflation; the reserve requirement ratio will be raised by 50 basis points from 24 February. The move weighed on the materials sector, which gets much of its demand from China, but the rest of the market shrugged it off.
The Chinese Shanghai Composite fell due to the announcement of further monetary tightening measures and in anticipation of news from top refiner Sinopec, as it is expected to issue bonds to the value of $US3.5 billion. In Hong Kong the market rose as property stocks recovered following successive steep falls for the sector in recent sessions, also banking giant HSBC has gained 7 percent this month ahead of its annual results. The Japanese market finished higher at 9-month highs, even though a number of exporters saw profit taking due to a stronger yen.
In China the SSE Composite closed down 0.9% (or -27 points) at 2,900, while in Hong Kong the Hang Seng Index was up 1.3% (or 293 points) at 23,302 and in Japan the Nikkei 225 Index was up 0.1% (or 6 points) at 10,843.
Commodities
The Dollar Index was higher at 78.43 on a higher Euro, while the Australian Dollar last traded above parity at 101.39. Commodities were generally higher.
Gold has risen for a third straight week and silver reached 31-year highs. Crude futures edged lower Friday ahead of a contract expiration and a long U.S. holiday weekend, but increasing tensions in the Middle East kept prices elevated.
For the session the Benchmark crude NYMEX for December delivery was down 0.2% (or -$US0.16) to settle at $US86.20. Copper prices are back at 2-year highs. Copper for December delivery was down -0.3% (or -1.5 cents) at $US4.5015. April gold was up 0.3% at $US1,388.60.
ASX Market News
AHE – Automotive Holdings Group Ltd reported a modest rise in underlying profit for 1H11 and is optimistic about the second half of the financial year.
BBG – Billabong International, the surfwear retailer, says its 1H11 profit declined by 18 percent but it predicts FY revenue to rise 14 per cent.
CMJ – Consolidated Media Holdings posted an 87 percent fall in reported 1H11 net profit, but says improved contributions from its pay-television investments helped lift operating net profit.
DUE – Duet Group, the energy distributor, reported 1H11 profit declined 51 percent as it continues to focus on improving the operational performance of its assets.
FMG – Fortescue Metals Group Ltd now plans to regularly return some of its profits back to shareholders after declaring a maiden dividend on the back of a 7-fold increase in interim net profit.
JHX – James Hardie Industries has slashed its full year guidance after reporting a 3Q loss of $26.15 million.
LLC – Lend Lease, Australia’s largest property developer, is positive about its FY11 operating outlook, after reporting a 10.5 percent rise in 1H11 net profit.
LWB – Little World Beverages, the specialist brewers, has posted a 35.4 percent rise in 1H11 profit, and predicted FY net profit before significant or non-recurring items would be around $8.8 million.
MCC – Macarthur Coal has reduced its FY production target by 18 percent as rain and flooding hit operations.
MRE – Minara Resources Ltd has increased FY net profit by 21 percent on stronger nickel prices and expects production volumes to rise in 2011.
RMS – Ramelius Resources expects a near four-fold increase in pre-tax 1H11 profit due to higher gold production.
SGM – Sims Metal Management, the world’s largest scrap metal recycler has increased first-half net profit by 23.6 percent.
SKT – Sky Network Television lifted half year net profit 18.9 per cent to $45 million, attributed to the success of the MY SKY HDi decoder and a rebound in advertising sales.
SPT – Spotless Group, the facilities services provider, has posted 1H11 net profit down 29 percent, but says FY revenue and earnings should exceed last year’s.
STO – Santos, the oil and gas producer, reported a 15.2 percent increase in FY net profit on higher prices for the fuels.
Local Corporate Reporting
BSL – BlueScope Steel Ltd Interim 2011 Results
CGF – Challenger Financial Services Interim 2011 Results
CTX – Caltex Full year 2010 Results
BCS – BrisConnections Unit Trusts Interim 2011 Results
HST – Hastie Group Ltd Interim 2011 Results
UGL – United Group Ltd Interim 2011 Results
WHC – Whitehaven Coal Interim 2011 Results
WHG – WHK Group Ltd Interim 2011 Results
WPL – Woodside Petroleum Full year 2010 Results
COH – Cochlear Ltd Interim 2011 Ex-dividend date
TLS – Telstra Corp Interim 2011 Ex-dividend date
ASX – to open lower
US & UK/Europe – mixed
ANZ down -3.9% & NAB down -0.2%
NEM down -0.8%, JHX up 1.4%, NWS up 1.4%
Head of Research
Tags: Asian Markets, ASX News, BHP, Business News, Commodities, European Markets, gold, S&P500, stockmarket, trading, US Market wrap
