* U.S. stock markets surged overnight and look set to test their multi-year highs near-term.
* European stock markets also surged overnight, as European leaders edged closer to a fresh financing package for Greece and avoiding contagion concerns in other debt-laden members of the euro zone.
* Asian stock markets ended mixed yesterday, as Chinese manufacturing data weighed on sentiment. Expect Asian markets to play catch up with the U.S. and European markets as investors look for “risk-on” trades.
* Commodities prices traded generally mixed, but Gold prices remained below record levels again, closing below $US1,600.
The SPI Futures is trading below the key pivot level of 4600, ending up 1.0% (or 45 points) at 4,579. The key levels for our index today are 4600 and 4530. Australian shares are set to trade higher today after positive leads from key markets in the U.S. and Europe.Â
Investors received a boost as EU leaders made progress on the debt crisis, but the U.S. debt ceiling issue is still unresolved. Expect to see some bargain-hunting taking today, as we appear to have found a base, providing the U.S. can get their debt ceiling issues resolved.
See below for ASX listed companies in the news today.
Economics News Today
*Â Q2Â Â Â Â Â International Trade Price:Â Import & Export Reports.
U.S. Markets
U.S. stock markets surged overnight and look set to test their multi-year highs near-term. Investor optimisim blossomed as the EU made progress on containing their sovereign-debt crisis, taking steps towards a fresh Greek financing package and as the U.S. moves closer to addressing its debt ceiling issues.Â
The Dow Jones Index finished higher, as all but one stock in the DOW 30 participated in the rally, and it is now within 0.5% of its multi-year high. In the broader market the S&P 500 stock index gains were led by the financials, energy and materials sectors and it is now within 1.5% of its multi-year high, while the tech-heavy Nasdaq continued higher on the back of more solid earnings reports.Â
Traders pushed stocks prices higher on hopes that U.S. negotations over raising of the debt ceiling will be resolved, though there is still no confirmation from Washington on this matter.Â
In corporate news Morgan Stanley climbed 11% after showing resurgent revenue in the company’s investment-banking, trading and wealth-management units. Intel actually fell -0.8%, despite reporting its second-quarter profit rose a better-than-expected 2.3%, but margins fell.
All ten company groups that make up the S&P index traded generally higher: Industrials were up 1.5%, the Technology sector was up 0.5%, Materials were up 1.2%, while the Financials sector was up 2.4%, Consumer Staples were up 1.2%, and the Energy sector was up 2.0%.
The Dow Jones closed up 1.2% (or 152 points) at 12,724, the S&P 500 index closed up 1.4% (or 17 points) at 1,343, the Nasdaq ended up 0.7% (or 20 points) at 2,834, and the smaller cap Russell 2000 was up 1.1%.
European Markets
European stock markets surged overnight, as European leaders edged closer to a fresh financing package for Greece and avoiding contagion concerns in other debt-laden members of the euro zone. The Stoxx Europe 600 index recovered from an early sell-off to end 1% higher on news of the package.Â
Traders went in search of “risk-on” assests and equities to add to their portfolios, and banks were also the big gainers as investors went bargain hunting after their recent heavy sell-off.Â
In the PIIGS markets Greece rose 2.5%, Italy jumped 3.5% and Spain rose 2.9%.Â
In London the FTSE 100 rose 0.8%, led by the banks, but miners such as Rio Tinto and Xstrata declined 1% after data in China showed that Chinese manufacturing activity contracted in July. In Germany the DAX also rose led by the financials.
In London the FTSE 100 index was up 0.9% (or 50 points) at 5,903, the German DAX was up 0.9% (or 69 points) at 7,290, while in France the CAC was up 1.7% (or 62 points) at 3,817.  Â
Asian Markets
Asian stock markets ended mixed yesterday, as Chinese manufacturing data weighed on sentiment. Trading remained cautious ahead of an EU financial summit of euro zone leaders in Brussels, but improved as an agreement was reached late in the session between France and Germany on a second bailout package for Greece.Â
Sentiment across the region was overshadowed by data out of China as a preliminary reading showed the HSBC China purchasing managers’ index (PMI) fell to 48.9 in July from 50.1 in June, as a measure below 50 indicates a contraction.Â
In Japan the Nikkei Stock Index ended flat, while in Hong Kong the Hang Seng Index also ended flat.Â
In China the Shanghai Composite Index fell -1%. The Chinese government has managed to slow down industrial growth through its tightening measures and this is expected to continue in the months ahead. However the government investment in infrastructure projects should still support gross domestic product (GDP) growth of 9% for the rest of this year, according to a HSBC leading economist. Expect Asian markets to play catch up with the U.S. and European markets as investors look for “risk-on” trades.
In China the SSE Composite was down -1.0% (or -28 points) at 2,766, while in Hong Kong the Hang Seng Index was down -0.1% (or -16 points) at 21,987 and in Japan the Nikkei 225 Index was up 0.1% (or 4 points) at 10,010. The South Korean KOSPI was down -0.5% for the session, while the Indian market was down -0.4%.   Â
Commodities
The Dollar Index was lower at 73.92 on a higher Euro, while the Australian Dollar last traded lower at 108.41. Commodities prices were generally higher.
For the session the benchmark crude NYMEX for July delivery was up 0.8% (or $US0.75) to settle at $99.15. Copper prices are still below 2-year highs as copper for July delivery was down -1.2% (or -5.1 cents) at $US4.375. July gold was down -0.6% (or -$US9.90) at $US1,588.00.
ASX News Today
CZN – Corazon Mining (formerly Xanadu Resources Limited) the explorater with mineral projects in Australia and Canada, says Macquarie is now a substantial holder with 5.2% interest.
FNP – Freedom Foods Group wants to exercise an option to take a further 18.7 million fully-paid ordinary shares in Auckland-based dairy company A2 Corporation Ltd.
GBG – Gindalbie Metals has completed the institutional component of  its new share sale.  The miner raised $35 million in an accelerated non-renounceable entitlement offer at 67 cents per new share, while the instito component was oversubscribed with $150 million worth of demand.
NCM – Newcrest Mining has posted a 16 percent rise in gold production in the fourth quarter, and annual production in line with earlier guidance by the company.
NWS – Two former Victorian supreme court judges have been appointed to assess an internal review of News Corporation’s Australian arm.
RSG – Resolute Mining’s full year production has declined 6 percent to 330,859 ounces of gold.
SXL – Southern Cross Austereo CEO says he does not see a need to have yet another media inquiry in response to the News of the World scandal in the UK.
SFH – Specialty Fashion opens on Thursday a La Senza branded store in the refurbished Westfield Shopping Centre in Sydney city.
STO – Santos has produced 8 percent more energy product in the second quarter of calendar 2011, although production is down -5 percent on a year to date basis. Â Sales were up 11 percent and sales revenue rose 20 percent over the period.
VBA – Virgin Australia’s proposed service from Brisbane to Abu Dhabi from February 2012 is under review.
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Local Corporate Reporting
Hastie Group Ltd (HST)    EGM re ratification & approval of shares Initial / Conditional placement
Kingsgate Consolidated Limited June Quarterly Report
St Barbara Limited (SBM) Â June Quarterly Results
Ex-dividend Date
None
Market Summary
ASX – to open higher
US & UK/Europe – higher
US ADRs – broadly higher
BHPÂ up 1.7% & RIOÂ up 0.5%; AWC up 1.5%
ANZÂ up 1.8% & NABÂ up 3.2%
NEMÂ Â up 0.8%, JHXÂ up 3.0%, NWSÂ up 3.4%
Commodities Stock Index up 1.4%
Gold Stocks Index down -0.2%
Oil Stocks Index up 1.9%Â
By Michael Hevern
Head of Research
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Tags: Asian Markets, ASX News, Business News, Crude Oil, European Markets, gold price, Stock Market Analysis, stockmarket, US Market wrap
