Online Stockmarket Trading Update

U.S. Markets

U.S. stock markets rose on Friday on good inflation figures, rising industrial production and consumer confidence hanging in.  Investors were encouraged by the latest round of economic data, although a lower-than-expected profit from Google weighed on the technology sector. 

The market gains followed data showing consumer sentiment rebounded more than expected in early April, while core inflation excluding energy and food prices was below expectations with a rise of just 0.1%.  Elsewhere data showed manufacturing activity in the New York area jumped unexpectedly, industrial production rose to its highest level in 3 months in March and capacity utilisation rose. 

For the week the major market measures fell, with the S&P 500 and the Nasdaq down for a second consecutive week in the red.  Stocks have been hurt by a disappointing start to the 1Q earnings season and concerns about rising commodity costs. 

Google and Bank of America reported on Friday with profits below analysts’ expectations. Google shares plunged 8.3% as earnings were hurt by surging operating costs, while Bank of America shares fell 2.4%, hurt by a drop in revenue across the majority of its businesses.  Some good news prevailed with Charles Schwab up 2.1% as the broker’s 1Q profit jumped and trading volume climbed, from the previous year where results were hurt by charges.  Shares in toy maker Mattel jumped 4.1% after 1Q earnings fell 33% as expenses rose, but the company benefited from strength in its Barbie division along with merchandise linked to the film Toy Story 3.  In M&A activity Chesapeake Energy said it will buy Bronco Drilling at a 5.8% premium to Thursday’s closing price.

The Dow closed up 0.5% (or 57 points) at 12,341, while in the broader market the S&P 500 index closed up 0.4% (or up 5 points) at 1,320 and the tech-heavy Nasdaq ended up 0.2% (or 4 points) at 2,765.

The ten company groups that make up the S&P index had mixed trading. The Energy sector was up 0.8%, Healthcare was up 0.9%, Materials were up 0.7%, Consumer Staples rose 0.5%, Financials were up 0.1%, and the Technology sector was down -0.2%.

European Markets

European stock markets closed higher Friday night, despite concerns over the stability of the euro zone.  Moody’s Investors Service downgraded the Irish foreign and local currency government bond ratings by two notches to Baa3 from Baa1, just one notch above “junk” status.

The downgrade weighed on the euro, which struggled in the Friday trading session as traders reassessed the simmering eurozone debt problems.  Insurance to protect against a default of Spanish bonds has been creeping up since Portugal bowed to reality and formally requested a bailout from European officials. 

European stocks pared losses after the ECB Vice President said the central bank is prepared to do what is necessary to control inflation, hinting more ECB rate hikes could be coming this year.

In London the FTSE 100 index closed up 0.5% (or 32 points) at 5,996, the German DAX was down 0.4% (or 31 points) at 7,178, while in France the CAC was up 0.1% (or 4 points) at 3,975.

Asian Markets

Asian stock markets mostly fell Friday after news that Chinese economic growth and inflation had both exceeded expectations.  Concerns resurfaced that Chinese interest rates are in for another round of hikes, weighing on some other regional markets.  The Chinese March consumer price index (CPI) showed the fastest inflation rate since July 2008 and was up 5.4% from a year earlier, up from 4.9% in February. The Chinese first quarter gross domestic product was up an annualised 9.7%, down marginally from the fourth quarter’s 9.8% but still above market expectations. 

In India the market lost 1.6%, hit hard as results and forecasts from bellwether Infosys Technologies disappointed investors and India’s own inflation data triggered interest rate worries there as well. 

In Hong Kong the Hang Seng Index ended little changed above the 24,000 level, while in China the Shanghai Composite Index bucked the trend by rising on the session.  Property developers which had dropped in the previous session in anticipation of a jump in March consumer prices rose to lead the rebound. Gold miners in the region traded higher after spot gold hit a fresh record high and is rapidly approaching $US1,500 a troy ounce in Asian trade.

In China the SSE Composite was up 0.3% (or 8 points) at 3,050, while in Hong Kong the Hang Seng Index was down -0.01% (or -6 points) at 24,008 and in Japan the Nikkei 225 Index was down -0.7% (or -62 points) at 9,592. The South Korean Kospi Composite closed flat. 

Commodities

The Dollar Index was higher at 74.83 on a lower Euro, while the Australian Dollar last traded around record levels at 105.65. Commodities were generally higher.

For the session the Benchmark crude NYMEX for April delivery was up 1.4% (or $US1.55) to settle at $US109.39. Copper for April delivery was down -0.6% (or -2.7 cents) at $US4.2540. April gold was up 0.9% (or $US13.60) at $US1,486.80.

ASX Market News

AJL – AJ Lucas Group, the energy and mining services provider, has won new work valued at $200 million across its drilling and construction divisions.

WAN – West Australian Newspapers Holdings has completed a $40 million new share sale at an issue price of $5.20 per new share.

WHC – Whitehaven Coal Ltd, the potential takeover target, says companies have completed due diligence and submitted formal proposals for the company.