* US stock markets recovered from an early sell-off to finish modestly higher, as the Philly Fed figures surprised to the upside.
* European stock markets fell overnight, as concern and uncertainty about the outcome of the EC meeting of euro-zone ministers this weekend.
* Asian stock markets ended lower yesterday, as growth sensitive resources companies led the falls again. Markets are expected to pullback again today.
* Commodities prices traded sharply lower, as Gold prices fell to $US1,609 and while crude-oil closed down around $US86.
The SPI Futures is trading around the key pivot level of 4200, ended up 0.3% (or 13 points) at 4,161. The key levels for our index today are 4230 to 4130.
Yesterday Australian shares sold off again, following on from falls in the US markets the previous night. The miners led the falls once again, as investors continued to be concerned over the eurozone debt crisis, falling global growth and the weakening Chinese economy. The issues pertaining to the European sovereign debt crisis remain at the front of traders minds and until we can see some clarity there, the equities markets will continue to experience volatility.
Business confidence suffered a sharp fall in the third quarter, according the National Australia Bank quarterly survey of more than 900 firms showed its measure of business confidence slumped to -4 in the September quarter (from +5), reflecting acute global market volatility and fears about the European debt crisis. The survey’s measure of business conditions dropped to -3 (from +2), with sales, profitability and employment all under pressure.
The All Ordinaries (XAO) gave back some of its recent gains today closing down -1.6% at 4207, the S&P/ASX 200 (XJO) closed down -1.6% at 4145 and at 4.20 pm the SPI September futures contract was down -1.7% at 4148.
Aussie investors are expected to show caution today, following the mixed leads from the US and Europe, as investors questioned the European Commission’s commitment to the bank rescue plan and economic growth forecasts were wound back. The EC summit this weekend will be pivotal. Commodities sold down sharply overnight which will weigh on our miners today. We continue to have a busy week for AGMs and production reports, see below for details. In the Analyst’s Eye today we tell you one option to protect your banks dividends.
See below for ASX listed companies in the news today.
Economics News Today
* Q3 International Trade Price: Exports and Imports.
U.S. Markets
Commodities traded sharply lower. Copper prices plunged over -6 percent, for its biggest single day collapse in four weeks, on fears of a double-dip recession and growing doubts that Europe will get a handle on its debt crisis. Crude-oil markets felt little impact after news of the death of Libyan strongman Muammar Gaddafi, though it could lead to an earlier-than-expected full restoration of Libya’s oil exports. Libya produced about 1.4 million barrels per day of mostly high value light sweet crude before the rebellion against Gaddafi broke out at the start of 2011. Gold fell -2 percent, its biggest 1-day drop in a couple of weeks, hurt by technical selling and concern over whether European leaders can reach a deal to boost the region’s bailout fund.
European Markets
Asian Markets
Asian stock markets ended lower yesterday, as growth sensitive resources companies led the falls again. Investor sentiment continues to be buffeted by the increased concerns over the eurozone’s ability to agree upon a credible resolution to its debt crisis and after the U.S. Federal Reserve issued a gloomy economic outlook.
In Japan the Nikkei Stock Index fell -1%, as tech stocks followed their Nasdaq counterparts lower. In Hong Kong the Hang Seng Index and in mainland China the Shanghai Composite Index declined -1.8%, as resource stocks continued to sell-off over -3.5%.
Commodities
For the session the Benchmark crude NYMEX for December delivery was down -0.9% (or -$US0.81) settle at $US85.98. Copper prices are seeking a support level as Copper for December delivery was down -6.1% (or -20 cents) at $US3.0420. December gold was down -2.1% (or -$US34.10) at $US1,609.00.
AMC – Amcor the packaging maker, says it remains confident of achieving earnings growth in the current financial year after its first quarter performance met expectations.
BOQ – Bank of Queensland (BoQ) dropped -2.9% after its credit rating was placed on review for possible downgrade after the bank reported a rise in bad debts. Earlier this month BoQ said natural disasters and three corporate exposures almost doubled its bad debts to $200 million for the year to August 31.
CGF – Challenger sold a record $509 million of retail annuities in the first quarter, putting the company on track to meet its target of a 25 percent increase in retail annuity sales for the year.
ENV – Envestra the natural gas transporter has maintained its guidance for a 33 percent jump in full year net profit, underpinned by regulatory mandated gas price increases.
LEI – Leighton Holdings says the Standard & Poor’s downgrading of its credit rating does not properly reflect the company’s credit quality. Also Leighton Holdings has closed a six-year, $US600 million Indonesian leasing facility.
MCC – MacArthur Coal says Peabody Energy and ArcelorMittal have extended the offer period for the $4.83 billion takeover.
NCM – Newcrest Mining reported a 16% lower gold production in the September quarter, due to maintenance shutdowns at Lihir in PNG, but says it still expects to meet production and cost guidance. Also cash costs of $A594 per ounce were 10 per cent. Newcrest Mining plunged -6.4%.
OMH – OM Holdings the manganese miner says production fell in the three months to September and the company has forecast higher production in the final quarter of the year.
QAN – Qantas disruptions – The union representing Qantas engineers has called off all protected industrial action for three weeks.
RIO – Rio Tinto has offered $C578 million ($A602 million) for Canadian junior uranium explorer Hathor Exploration in an all cash deal.
STO – Santos the oil and gas producer Santos has increased third quarter sales revenue by 27 percent and has maintained full year production guidance.
WBC – Westpac says weak demand for loans is making it tougher for banks but there are still ways of growing profits.
WES – Wesfarmers increased first quarter sales at its Coles supermarket by 8 percent, but it faces challenging trading conditions in the lead up to Christmas.
SAI Global (SAI) Full year 2011 AGM
ASX – to open higher
US & UK/Europe - Mixed
Commodities Stock Index up 0.3%
Gold Stocks Index down -1.2%
Oil Stocks Index up 0.8%
US ADRs – Broadly Mixed!!…
BHP down -0.3% & RIO down -6.1%; AWC up 0.9%
ANZ up 0.9% & NAB down -1.3%
NEM down -1.1%, JHX up 2.0%, NWS up 0.9%
By Michael Hevern
Head of Research
Written on 5 September, 7:15am
Tags: Asian Markets, ASX News, Business News, Crude Oil, Dow, European Markets, Stock Market Analysis, stockmarket, trading, US Market wrap
