* U.S. stock markets rose for a third session, as investors took heart when the Greek parliament passed its onerous austerity package, and U.S. financial stocks jumped following a major settlement on mortgage-backed securities.
* European stock markets rallied as the Greek parliament passed the austerity measures legislation enabling them to gain access to more bailout aid and avoid a debt default.
* Asian stock markets ended higher yesterday, as investors pre-empted a successful Greek vote. Across the region energy and resource sector stocks had strong gains.
* Commodities prices traded sharply higher. Copper and crude oil traded around 3% higher. The copper price is at its highest level in eight weeks.
The SPI Futures is trading below the key pivot level of 4600, and ended up 0.7% (or 31 points) at 4,550. The key levels for our index today are 4560 and 4480. Australian shares are set to trade higher again today after positive leads from key markets in the U.S. and Europe.
The market month-end rally continues, as investors should have finalised their portfolios for the end-of-year cleanout. Look for energy, mining and banking stocks to see buying again as we see further “window dressing” by fund managers as they rule off their books for the financial year.
See below for ASX listed companies in the news today.
Economics News Today
* End of Financial Year
U.S. Markets
U.S. stock markets rose for a third session. Investors took heart as the Greek parliament passed its onerous austerity package and U.S. financial stocks jumped following a major settlement on mortgage-backed securities.
The Dow Jones Index had its best 3-day performance since mid March. The broader markets also had strong sessions with materials, energy and financials all leading the markets higher. The Dow Jones and Nasdaq are on track for their best weekly gain since March, while the S&P 500 is setting up for its biggest weekly move since November.
In corporate news Monsanto jumped 5% after it raised its fiscal 2011 profit guidance and reported a 77% rise in profit for its fiscal third quarter. Meanwhile Visa and Mastercard surged over 11% after the Federal Reserve’s planned regulation to curb debit-card “interchange” fees that banks can charge retailers proved to be less onerous than anticipated.
The U.S. dollar weakened against the euro overnight after Greek politicians ignored violent protests in the streets and passed an austerity bill that kept alive a second round of bailout funding from European authorities. This has flowed through to higher commodities prices with crude oil and copper prices up around 3 percent in the session.
All ten company groups that make up the S&P index traded higher: the Financials sector was up 2.1%, Materials were up 1.6%, the Energy sector was up 1.2%, the Technology sector was up 0.8%, while Consumer Staples were up 0.5% and Industrials were up 0.5%.
The Dow Jones closed up 0.6% (or 73 points) at 12,261, the S&P 500 index closed up 0.8% (or 11 points) at 1,307, the Nasdaq ended up 0.4% (or 11 points) at 2,740, and the smaller cap Russell 2000 was up 0.3%.
European Markets
European stock markets rallied overnight as the Greek parliament passed additional austerity measures enabling them to gain access to more bailout aid and avoiding a debt default. The European Stoxx 600 index climbed 1.7%.
The passage of the unpopular and onerous austerity measures in Greece is viewed as moving the euro-zone closer to containing its debt crisis. Stocks have been sold-off for weeks as investors have fretted over the possibility of a Greek default, raising the spectre a contagion risk to other European banks and other heavily indebted euro-zone countries. Other PIIGS economies including Italy and Spain also racked up strong gains, up over 2 percent. In the euro-zone banks and miners led the gains for the session.
In London the FTSE 100 index was up 1.5% (or 89 points) at 5,855, the German DAX was up 1.7% (or 124 points) at 7,294, while in France the CAC was up 1.9% (or 72 points) at 3,924.
Asian Markets
Asian stock markets ended higher yesterday, as investors pre-empted a successful Greek vote, thus avoiding a debt default. Across the region energy and resource sector stocks had strong gains as crude oil and commodities prices rebounded off key levels, but there were gains across the board as most sectors finished in the green.
In Japan the Nikkei Stock Index jumped higher, led by financials, technology and export stocks. In Hong Kong the Hang Seng Index finished flat, but the Chinese market bucked the trend finishing in the red as profit takers stepped in after six consecutive sessions of gains. Look for further “window dressing” by fund managers as they rule off their books for the financial year.
In China the SSE Composite was down -1.1% (or -30 points) at 2,728, while in Hong Kong the Hang Seng Index was flat at 22,061 and in Japan the Nikkei 225 Index was up 1.5% (or 148 points) at 9,797. The South Korean KOSPI was up 1.5% for the session, while the Indian market was up 1.1%.
Commodities
The Dollar Index was lower at 74.63 on a higher Euro, while the Australian Dollar last traded higher at 105.15. Commodities prices were sharply higher.
For the session the benchmark crude NYMEX for July delivery was up 2.3% (or $US2.17) to settle at $95.03. Copper prices are still below 2-year highs but copper for July delivery was up 2.9% (or 12 cents) at $US4.2100. July gold was up 0.7% (or $US10.20) at $US1,508.90.
ASX News Today
AGO – Wah Nam International Holdings says it will allow its offer for iron ore miner FerrAus to lapse, after being trumped by a deal between the target and Atlas Iron.
AIO – Asciano has renewed an existing coal haulage contract with Coal & Allied Industries in the NSW Hunter Valley.
CNP – Centro Retail and Centro Properties have completed the sale of most of their US properties to Blackstone Real Estate Partners.
MOL – Moly Mines will borrow $US494 million through China Development Bank Corporation (CDB) to build the Spinifex Ridge molybdenum and copper mine in the Pilbara region WA.
NWS – News Corp is aiming to sell struggling social network site MySpace this week after three years of massive losses, according to a person close to the source.
TSE – Transfield Services and Veolia Transdev are bidding together to run Sydney’s ferry service.
WBC – Westpac has opened its first Beijing branch after receiving approval from the China Banking Regulatory Commission last month.
Local Corporate Reporting
None
Ex-dividend Date
EDT Retail Trust (EDT) Full year 2011 Ex-dividend date
Market Summary
ASX – to open higher
US & UK/Europe – higher
US ADRs – broadly higher
BHP up 1.6% & RIO up 1.1%; AWC up 2.3%
ANZ up 1.8% & NAB up 2.2%
NEM up 1.4%, JHX up 6.7%, NWS up 1.3%
Commodities Stock Index up 1.6%
Gold Stocks Index up 2.1%
Oil Stocks Index up 1.3%
By Michael Hevern
Head of Research
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