* U.S. markets rose overnight for the seventh session in nine, led by energy and telecoms.
* European markets finished generally higher, but credit downgrades for Portugal and Greece capped any gains, prompting weakness in the banking sector.
* Asian markets ended mixed yesterday. Japanese shares fell as high levels of radioactivity hindered work at the nuclear plant.
* Commodities were lower, as copper, gold and crude oil all experienced mixed results.
The SPI Futures is trading around the key weekly pivot level of 4750, closing up 0.6% (or 27 pts) at 4,810. The key levels for our index this week are 4750 and 4880. The ASX is set to trade higher as we finish off the quarter, look for mining and energy stocks to lead.
We had positive leads from overseas markets overnight. Investors pushed commodities prices higher with mining and energy stocks rising. There is plenty of economic data due for release this week that will impact our market including the Chinese PMI data and the U.S. non-farm unemployment report. Investors still need to monitor the geopolitical unrest in the Middle East and North Africa, the Japanese nuclear crisis, the European sovereign debt concerns, and the Aussie dollar which has again reached post-float highs.
See below for ASX listed companies in the news today.
U.S. Markets
U.S. markets rose overnight for the seventh session in nine, led by energy and telecoms. There is still critical data due out later this week on unemployment and manufacturing, including private-sector payrolls on Wednesday, monthly manufacturing data and monthly nonfarm payrolls on Friday.
The gains were largely driven by telecom stocks, which surged on continued optimism about consolidation in the industry after AT&T bid for Deutsche Telekom T-Mobile USA, to create the country’s largest phone carrier. Energy stocks were also strong as oil again edged up towards $US105 a barrel.
Consumer discretionary stocks rallied on consumer confidence news. The US dollar rose against major currencies overnight after the U.S. Federal Reserve said policy makers may have to withdraw their quantative easing and accommodative monetary policy before the GFC is declared definitively over.
In economic news the latest reading of the Conference Board’s consumer-confidence index showed a fall of 8.6 points to 63.4 in March – the decline was smaller than expected.
The Dow closed up 0.7% (or 81 points) at 12,279, while in the broader market the S&P 500 index was up 0.7% (or 9 points) at 1,319 and the tech-heavy Nasdaq ended up 0.9% (or 26 points) at 2,757.
All of the ten company groups that make up the S&P index traded higher, with out-performers including Energy up 1.2%, Materials up 1.1%, Consumer Staples up 0.9%, Industrials up 0.8%, while the Financials were up 0.2%.
European Markets
European markets finished generally higher. The Stoxx Europe 600 index ended up 0.1%.
Credit downgrades for Portugal and Greece capped gains, while the Italian market posted steep losses on weakness in the banking sector. Italian bank UBI Banca plunged 12% as it reported a 4Q net loss and said it would increase share capital by as much as EUR1 billion, this news triggered a sell-off in the banking sector of over 4% in the session. Sentiment was hurt late in the European session as S&P’s Ratings Services again downgraded Portuguese sovereign debt to BBB- from BBB, leaving it just one notch above junk status, with a negative outlook. It also cut the Greek rating to BB- from BB+.
In Germany the banking sector weighed on concerns for the need of further capital raisings in the sector.
In London the FTSE 100 index closed up 0.5% (or 27 points) at 5,932 led by mining and energy stocks, the German DAX was down -0.1% (or -4 points) at 6,934, while in France the CAC was up 0.3% (or 10 points) at 3,987.
Asian Markets
Asian markets consolidated yesterday. However Japanese stocks fell further, hit by rising concerns over radioactive leaks from the Fukushima Daiichi nuclear plant. The setback in resolving the nuclear crisis came after Tokyo Electric Power (Tepco) said that plutonium had been detected in samples of soil from the stricken Fukushima Daiichi nuclear plant. Investors are also nervous over reports that the government is considering temporarily nationalising Tepco to facilitate its reconstruction.
The Hong Kong market traded flat, while in China the Shanghai Composite Index fell but Chinese banks continued their rally (up 0.5%) in the choppy market after the bank earnings season got off to a good start last week. Indian stocks rose for a sixth straight session as a fall in crude oil prices eased worries about inflation, though this may be reversed today as Libyan unrest escalates.
In China the SSE Composite closed down -0.9% (or -25 points) at 3,124, while in Hong Kong the Hang Seng Index was down -0.1% (or -8 points) at 23,060 and in Japan the Nikkei 225 Index was down -0.2% (or -19 points) at 9,459.
Commodities
The Dollar Index was lower at 76.17 on a higher Euro, while the Australian Dollar last traded above parity at 102.02. Commodities were generally mixed.
For the session the Benchmark crude NYMEX for April delivery was up 0.5% (or $US0.48) to settle at $US104.46. Copper for April delivery was down -0.1% (or -0.3 cents) at $US4.3470. April gold was down -0.3% (or $US3.80) at $US1,419.80.
ASX Market News
CTX – Caltex Australia said refining margins had contracted and eroded earnings, as crude oil prices rose.
DCG – Decmil Group Ltd has been awarded a $71 million contract by BHP to install permanent accommodation at the Warrawandu Village in the Pilbara region, WA.
DOW – Engineering firm Downer EDI has raised about $79 million by selling new shares to retail shareholders.
EMG – Emergent Resources, the junior minerals explorer, is in talks about JVs to provide a rail link for its Beyondie iron ore project in WA.
GPT – GPT Group has finalised the sale of its US seniors housing portfolio to Health Care REIT Inc.
JBH – JB Hi-Fi reports strong cash flow and a buy back of as much as 10 percent of its shares ($170 million).
LEI – Thiess Ltd, a Leighton Holdings Ltd subsidiary, has won a $166 million contract at BHP Iron Ore’s Jimblebar iron ore mine in the Pilbara region, WA.
MMX – Murchison Metals Ltd delays report of a $1 billion blow-out in the estimated capital cost of its joint venture Oakajee Port and Rail (OPR) development in the midwest WA.
RIV – Rio Tinto Ltd has announced its $US4 billion takeover bid for South Africa-focused coal miner Riversdale Mining Ltd is now unconditional.
TLS – Telstra’s says revenue in Sensis, its directories arm, will fall for the next 3 years but it plans to address a slide in print advertising with a greater array of digital products.
WOW – Woolworths has told a Senate inquiry that it is not selling its home-brand milk for below cost despite a price war with its biggest competitor.
Local Corporate Reporting
CRZ – Carsales.Com Ltd (9.4 cents)
NCI – National Can Ind Ltd (1 cents)
Market Summary
ASX – to open higher
US & UK/Europe – higher overnight
Head of Research
