* U.S. stock markets ended mixed overnight with steady gains throughout the session, as investor concerns over Greek sovereign debt eased.
* European stock markets ended lower overnight as losses were led by bank stocks.
* Asian stock markets traded lower yesterday, with Chinese banks downgraded to underweight by Credit Suisse.
* Commodities prices traded generally higher.
The SPI Futures is trading below the key pivot level of 4600, ended up 0.7% (or 32 points) at 4,481. The key levels for our index today are 4520 and 4430. Australian shares is set to trade higher today after mixed leads from key markets in the U.S. and the Europe. Investors are likely to be finalising their portfolios for the end-of-year cleanout, also note options expiry is this week.
See below for ASX listed companies in the news today.
Economics News Today
* RBA – Reserve Bank Board Monetary Policy Meeting Minutes for June
* International Merchandise Imports for May.
U.S. Markets
U.S. stock markets ended mixed overnight with steady gains throughout the session. Investor concerns over Greek sovereign debt eased after a pledge by European leaders to avoid a Greek debt default helped push U.S. stocks higher.
The Dow Jones Index held above 12080, for its third straight gain, while in the broader market the S&P500 stock index closed higher for its fifth gain in six sessions, while the tech-heavy Nasdaq Composite climbed for the first day in three.
All S&P 500 sectors except financial stocks advanced, with Health care and consumer discretionary stocks leading the gainers, though financial stocks weighed on the markets rebound.
The Dow Jones closed up 0.6% (or 76 points) at 12,080, the S&P 500 index closed up 0.5% (or up 7 points) at 1,278, the Nasdaq ended up 0.5% (or 13 points) at 2,630, and the smaller cap Russell 2000 was up 0.9%.
All ten company groups that make up the S&P index traded mixed: Industrials were up 0.9%, the Materials were were up 0.9%, the Consumer Staples were up 0.8%, and the Technology sector was were up 0.4%, Energy sector was were up 0.3%, while the Financials sector was flat.
European Markets
European stock markets ended lower overnight as losses were led by bank stocks. The Stoxx Europe 600 index ended down 0.5%. In the region the losses came from the banking stocks, but miners also took a hit as investors reduced their exposure to riskier asset classes.
The euro-zone finance ministers have delayed a decision on providing further aid for Greece, while Italian stocks were down sharply on downgrade fears and as contagion remains a concern. Moody’s Investors Service has put the Italy’s Aa2 local and foreign currency government bond ratings on review for possible downgrade.
The European finance ministers said they will not decide on giving Greece EUR12 billion of bailout funds until lawmakers in Greece agree to new spending cuts and economic reforms. Though the European leaders agreed to increase the European Financial Stability Fund to EUR440 billion, which provides a lifeline to the euro-zone’s most distressed PIIGS economies. The European leaders have a huge task ahead of them as they must balance the goals of keeping the global financial system working, while in turn holding the euro-zone together.
In London the FTSE 100 index was down -0.4% (or -22 points) at 5,693, the German DAX was down -0.2% (or -14 points) at 7,150, while in France the CAC was down -0.6% (or -24 points) at 3,800.
Asian Markets
Asian stock markets traded lower yesterday.
In Japan the Nikkei Stock Index closed flat, with utility stocks offering support, despite Moody’s downgrading Tepco’s debt to junk status, citing further escalation of costs and damages from the continuing Fukushima nuclear plant disaster.
In Hong Kong the Hang Seng Index and in China the Shanghai Composite lost ground, after banks suffered a sell-off after downgrade of the sector by Credit Suisse. Credit Suisse has downgraded the Chinese banking sector to underweight from overweight, and has cut its forecast for China’s 2012 gross domestic product growth to 8.5%, from 8.9%, citing 2H11 persistent inflation, slowing growth and continued monetary tightening as likely dampening growth near-term. Property stocks were also sold-off.
In China the SSE Composite was down -0.8% (or -22 points) at 2,621, while in Hong Kong the Hang Seng Index was down -0.4% (or -95 points) at 21,600 and in Japan the Nikkei 225 Index was flat (or 3 points) at 9,354. South Korean KOSPI was down -0.6% for the session, while the Indian market was down -2.1%.
Commodities
The Dollar Index was lower at 74.99 on a higher Euro, while the Australian Dollar last traded lower at 106.38. Commodities prices were generally mixed.
For the session the benchmark crude NYMEX for June delivery was down -2.0% (or -$US1.94) to settle at $92.50. Copper prices are still below 2-year highs as Copper for June delivery was down -0.4% (or -1.4 cents) at $US4.0970. While June gold was up 0.6% (or $US9.30) at $US1,540.20.
ASX News Today
ASX – Australian Securities Exchange (ASX) has reached an agreement with Chi-X Australia Pty Ltd, for the provision of clearing and settlement services.
AQA – Aquila Resources Ltd is in a trading halt while it awaits a court decision on a dispute with Brazilian iron ore giant Vale.
BCI – BC Iron Ltd is meeting iron ore production targets and forecasts it will ship 2.3 million tonnes by the end of December this year.
CTX – Caltex Australia Ltd says it expects first half 2011 profit to fall to $100 to $115 million, due to challenging external environment and operating disruptions.
FML – Focus Minerals Ltd says it will be among Australia’s top five gold producers if fellow goldminer Crescent Gold Ltd accepts its takeover offer.
LNC – Linc Energy has received support for the Governor of Alaska in its bid to develop 50,000 BOPD Oil Field in Alaska.
LYC – Lynas Corporation Ltd’s says the investigation by the International Atomic Energy Agency (IAEA) into whether Lynas’s planned rare earth refinery in Malaysia presents radioactive risks is due to report this month.
LEI – Leighton Holdings Ltd and GE consortium have been awarded a $130 million contract to build the Mumbida wind farm south-east of Geraldton in WA.
MAP – Macquarie Airports says passenger traffic at Sydney Airport in May was up 4.2 percent on the same month last year, with particular growth in international travel.
SBM – St Barbara the gold miner has said that it is reviewing the merger agreement between Catalpa Resources and Conquest Mining and would consider its position.
STO – Santos Ltd and US-based Magellan Petroleum are in dispute over a $15 million deposit that Magellan wants back after the sale of a stake in a gas field collapsed.
TLS – Telstra Corp says its negotiations with NBN Co.and the Australian government over the A$9 billion sale of assets into Australia’s national high-speed broadband network are at an advanced stage.
Local Corporate Reporting
None
ASX – to open higher
BHP up 0.4% & RIO up 0.6%; AWC down -0.8%
Gold Stocks Index up 0.1%
By Michael Hevern
Head of Research
For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research.
Written on 20 June, 7:15am
Tags: Asian Markets, ASX News, Business News, Commodities, Crude Oil, European Markets, gold price, S&P500, Stock Market Analysis, stockmarket, US Market wrap
