* U.S. stock markets were closed overnight for the U.S. 4th of July long weekend.
* European stocks have closed mostly firmer, posting modest gains.
* Asian stock markets rose, following the U.S. and European markets higher as those markets continued their surge higher.
* Commodities prices were generally higher. Copper is at its highest level in 8 weeks.
The SPI Futures is trading above the key pivot level of 4600, ending up 0.4% (or 18 points) at 4,614. The key levels for our index today are 4660 and 4580. Australian shares are set to trade higher today after positive leads from key markets in Europe. The U.S. markets were closed for the 4th July. Note this is a busy week for economic news locally and globally, culminating in the U.S. Non-Farm Payrolls report on Friday.
Locally retail sales figures for May disappointed, down -0.6%, and economists unanimously believe that the RBA will leave rates on hold today. The government has announced it will release the details of the Carbon Tax on Sunday.
See below for ASX listed companies in the news today.
Economics News Today
* June: Australian PSI
* May: International Balance of Trade in Goods & Services
* June: VFACTS vehicle sales
* July: RBA – Australian cash rate decision (4.75%)
U.S. Markets
U.S. stock markets were closed overnight for the U.S. 4th of July long weekend.
European Markets
European stocks have closed mostly firmer, posting modest gains. Trading volumes were thin as the US markets were shut for the Independence Day public holiday. The Standard and Poors Rating Agency has warned that the current debt relief efforts for Greece are virtually a default, which is the outcome the eurozone is trying to avoid at all costs.
In London the FTSE 100 rose above 6,000 for the first time since May. LME Copper rose as market sentiment improved in the wake of solid US manufacturing data last week, and expectations that emerging market demand will pick up later this year.
In Germany the market rose again, but the insurance sector regulator has said about 10 percent of European insurance companies tested do not have enough capital to withstand exceptional economic shocks.
In London the FTSE 100 index was up 0.5% (or 28 points) at 6,018, the German DAX was up 0.3% (or 24 points) at 7,443, while in France the CAC was down -0.1% (or 4 points) at 4,003.
Asian Markets
Asian stock markets rose, following the U.S. and European markets higher as those markets continued their surge higher. Asian markets have been lagging other global markets in the past week, as U.S. manufacturing PMI data was better-than-expected and the Greek situation was resolved for the time being.
In Asia exporters and financial shares drove the gains for the session. In Japan the Nikkei Stock Index rose above the 10,000 level during the session, as analysts became more optimistic over the country’s economic recovery from the devastating March 11 earthquake disaster. They recommended economically sensitive export related stocks as the country’s manufacturing sector recovers.
In Hong Kong and China the markets jumped over 1.8%, led by the financials.
In China the SSE Composite was up 1.9% (or 54 points) at 2,813, while in Hong Kong the Hang Seng Index was up 1.7% (or 373 points) at 22,770 and in Japan the Nikkei 225 Index was up 1.0% (or 97 points) at 9,965. The South Korean KOSPI was up 0.9% for the session, while the Indian market was up 0.3%.
Commodities
The Dollar Index was lower at 74.28 on a higher Euro, while the Australian Dollar last traded higher at 107.36. Commodities prices were generally higher.
For the session the benchmark crude NYMEX for July delivery was up 0.1% (or $US0.12) to settle at $95.06. Copper prices are still below 2-year highs, with Copper for July delivery down -0.1% (or 0.2 cents) at $US4.2900. July gold was up 0.8% (or $US12.30) at $US1,494.60.
ASX News Today
ANN – Ansell, the latex products manufacturer, has bought US surgical safety products maker Sandel Medical Industries for $US13.5 million.
ASB – Austal the Perth-based shipbuilder says the US Navy has confirmed the construction of two more high speed vessels (JHSV), the sixth and seventh in a $US1.6 billion, 10-vessel program.
Banks – UBS has reduced their earnings per share forecasts on Australia’s banks to now sit 6%-11% below consensus, and cutting CBA to Neutral and upgrading Westpac to Buy in the process. UBS says banks remain structurally challenged, but at 1.8 times their current price-to-book valuations are fair.
BHP – BHP has completed an expanded $10 billion capital management program that saw it buy back 241.8 million of its own shares. BHP says it’s received provincial government approval for its Jansen potash project in Canada.
CXY – Courgar Energy, which is facing charges for allegedly contaminating groundwater in Queensland, maintains it did not cause any environmental damage.
LEI – Leighton Holdings’ subsidiary Thiess has entered into an alliance with energy network provider Ausgrid to deliver electricity infrastructure in NSW.
MIN – Mineral Resources (MIN) has been awarded a contract for design, construction and operation of the second iron ore processing facility and related infrastructure at Fortescue Metals Group’s Christmas Creek mine in WA.
MMX – Murchison Metals shares plunged, though they did recover, after it said costs at the embattled Oakajee port and rail project had blown out. Murchisan has said the cost comes in 36% above the previous feasibility study, the first export date has been pushed back to 2015, and initial capacity has been cut to 42 million tons.
NWS – News Corp has been blocked by the federal government to stop Sky News winning a $220 million contract to broadcast Australian television into Asia.
NUF – NuFarm, the agricultural chemicals supplier, has appointed Paul Binfield as its new CFO.
QAN – Qantas shares jumped after news that the grounding of Tiger Airways Australia will cost the airline $1.5 million a week.
RIO – Rio Tinto may buy all or part of a coal project in Queensland’s Bowen Basin currently owned by Australian Pacific Coal.
TEN – Ten is about to make substantial cost cuts including programing and staff.
TWE – Shares in Treasury Wine Estate, the Foster’s spin off, have risen 9% after reports of takeover interest From China’s Bright Food.
WEB – Webjet the online travel agency says the grounding of Tiger Airways will not impact its financial expectations and that it is helping customers find alternative travel options.
Local Corporate Reporting
None
Ex-dividend Date
Aneka Tambang (ATM)
Biotech Capital (BTC)
Clime Capital (CAM)
Market Summary
ASX – to open higher
US & UK/Europe – US closed & EU higher
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 4 July, 7:15am
Tags: Asian Markets, ASX News, Business News, Commodities, Ex Dividend, Stock Market Analysis, stockmarket, US Market wrap
