* U.S. stock markets closed mixed on Friday. The Dow Jones and the S&P 500 barely snapped a six-week losing streak.
* European stocks found some support on Friday, but have continued to weaken over the week. Investors were relieved as France and Germany appear to be working toward a solution on a bailout package for debt-laden Greece.
* Asian share markets traded lower again last week, with Hong Kong and Australian markets trading at their lows at mid-September 2010 levels, after a sharp sell-off in the U.S. mid-week.
* Commodities prices traded generally mixed. Crude oil prices slumped to $US92.
The SPI Futures is trading below the key pivot level of 4600, closing up 0.1% (or 3 points) at 4,480. The key levels for our index this week are 4650 and 4420. Australian shares are set to trade flat as we look to find support after generally positive leads from key markets in the U.S. and Europe.
The ASX All Ordinaries and the S&P/ASX 200 experienced selling again last week. The Aussie market continues to test the key support levels of its March lows and is trading at the lower end of its falling channel formation. It is crucial that support holds at these levels, otherwise we could see the market test 4200 near-term.
Investors are likely to be finalising their portfolios for the end-of-year cleanout. Look for defensive stocks to offer support.
See below for ASX listed companies in the news today.
U.S. Markets
U.S. stock markets closed mixed on Friday. The Dow Jones and the S&P 500 barely snapped a six-week losing streak, as a resolution to the Greek debt crisis looks to be getting closer.
France and Germany appear to be working toward a solution on a bailout package for debt-laden Greece. A Greek default would be fractious to the European Economic Union, with global ramifications on financial systems, leading to massive losses for creditors and impacting on the global economic recovery.
For the week, the Dow Jones index gained 0.4%, while in the broader market the S&P 500 index rose 0.01%, but the tech-heavy Nasdaq has declined in 9 of the past 11 sessions and has declined for five consecutive weeks. On Friday gains in the financial, telecom and consumer discretionary sectors supported the market but energy stocks lagged as crude oil futures fell to a 4-month low.
This week investors will continue to be wary of risk while the Greek debt crisis remains unresolved, the QE2 is turned off and the U.S. debt ceiling remains unresolved.
The Dow Jones closed up 0.4% (or 43 points) at 12,004, the S&P 500 index closed up 0.3% (or up 4 points) at 1,271, the Nasdaq ended down -0.3% (or -7 points) at 2,617, and the smaller cap Russell 2000 was up 0.2%.
All ten company groups that make up the S&P index traded mixed: the Financials sector was up 1.0%, Industrials were up 0.5%, the Consumer Staples were up 0.8%, Materials were flat, the Technology sector was down -0.1%, and the Energy sector was down -0.2.
European Markets
European stocks found some support on Friday, but continued to weaken over the week.
Investors were relieved as France and Germany appear to be working toward a solution on a bailout package for debt-laden Greece. The German Finance Minister has proposed a compromise over the Greek bailout plan effectively boosting lending capacity of the Emergency Financial Stability Facility to EUR440 billion euros and see member states double the amount of guarantees they provide the fund.
For the week in London the FTSE slumped by 1.9% and is down for 6 of the past 7 weeks, while in Germany the DAX 30 was actually higher by 1.4% for the week.
The Moody’s Rating Agency has now put Italy on negative watch, further fuelling fears of contagion of the debt crisis in Europe. This was done after markets closed.
The FTSE 100 index was up 0.3% (or 16 points) at 5,715, the German DAX was up 0.8% (or 54 points) at 7,164, while in France the CAC was up 0.8% (or 31 points) at 3,823.
Asian Markets
Asian share markets have traded lower again last week, with Hong Kong and Australian markets trading at their lows at mid-September 2010 levels, after a sharp sell-off in the U.S. mid-week.
In Hong Kong the market has been under pressure as an announcement of higher bank-reserve requirements by China hit Hong Kong-listed financials. Persistent news of a possible Greek default has also unnerved investors.
For the week the Hong Kong market slumped -3.8%, while in China the market fell -2.2% with both markets at their mid-September lows.
In China the SSE Composite was down -0.8% (or -22 points) at 2,642, while in Hong Kong the Hang Seng Index was down -1.2% (or -257 points) at 21,695 and in Japan the Nikkei 225 Index was down -0.6% (or -60 points) at 9,351. The South Korean KOSPI was down -0.7% for the session, while the Indian market was down -0.6%.
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
ANZ – ANZ Banking Group has opened its first branch in India after the Reserve Bank of India granted ANZ a banking licence last October.
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.
BDR – Beadell Resources had a price enquiry as their shares have risen from $0.75 to $0.995 in the past few days.
BRM – Brockman Resources Ltd and Wah Nam International have agreed to work together on the Marillana iron ore project in WA after Wah Nam emerged with a 55 percent stake in Brockman after the conclusion of a hostile $900 million plus takeover.
CBA – Commonwealth Bank of Australia, Australia’s biggest lender, has quashed media speculation that it was ever interested in buying Insurance Australia Group.
RIO – Rio Tinto Ltd will take full ownership of coal miner Riversdale Mining Ltd after Indian conglomerate Tata Steel and will divest its 26.3 percent holding.
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.
TFC – TFS Corporation, the sandalwood plantation operator, has priced an offer of senior secured notes and options, to raise $150 million to acquire land and sandalwood for general corporate purposes.
WPL – Woodside Petroleum Ltd has revised its costs with $900 million in overruns and pushed back the start-up date by six months for its Pluto liquefied natural gas (LNG) project in WA.
Local Corporate Reporting
MAP Airports International Ltd May Traffic Results (MAP)
Ex-dividend Date
Metcash Ltd (MTS)
Market Summary
ASX – to open flat
US & UK/Europe – generally higher
US ADRs – Broadly Higher
BHP up 0.1% & RIO up 0.6%;
ANZ up 0.9% & NAB up 1.4%
NEM down -0.2%, JHX up 1.7%, NWs up 0.3%
Commodities Stock Index down -0.2%
Gold Stocks Index up 0.4%
Oil Stocks Index flat
By Michael Hevern
Head of Research
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Written on 20 June, 7:15am
