* US stock markets had another volatile week, stocks are closed the week higher with a strong gains in the final session. U.S. stocks surged to their highest levels since early August.
* European stock markets ended the week optimistically, as equities and the euro rallied on as investors bet that European leaders in crucial weekend meetings will move forward in resolving the eurozone sovereign debt crisis.
* Asian stock markets had a cautious close on Friday and were lower for the week. Investors chose caution ahead of the weekend eurozone meeting on the plan to find a solution to the European debt crisis.
* Commodities prices traded sharply higher, as Gold prices rose to $US1,640 and while crude-oil closed up around $US88.
The SPI Futures is trading around the key pivot level of 4200, ended up 1.1% (or 45 points) at 4,161. The key levels for our index today are 4230 to 4130.
Friday Australian shares drifted lower into the weekly close, with investor sentiment weighed down by the eurozone debt crisis. The mood is likely to continue to be subdued until we get some clarity over the proposed action plan for the eurozone bailout strategy. Hopes are fading that this weekend’s summit of European leaders will make headway in resolving the eurozone’s debt crisis.
The All Ordinaries (XAO) gave back some of its recent gains today closing down -0.1% at 4203, the S&P/ASX 200 (XJO) closed down -0.1% at 4142. The market drifted, with some sectors finishing up including HealthCare, Info Tech and Consumer Discretionary sectors were all up 0.4%, while the Industrials drifted 0.2% higher. The rest of the sectors ended flat except for Consumer Staples down -1.4% and Telcoms down -0.3%.
Aussie shares are expected to recover today, following the positive leads from the US and Europe, as investors were optimistic over the European Commision’s commitment to the bank rescue plan. There are plenty of AGMs and production reports again this week, see below for details.
See below for ASX listed companies in the news today.
Economics News Today
* Q3 PPI Report.
U.S. Markets
US stock markets had another volatile week, stocks are closed the week higher with a strong gains in the final session. U.S. stocks surged to their highest levels since early August. The market remained preoccupied with Europe and the constant round of rumours during the week.
Investors are giving the eurozone policymakers the benefit of the doubt that they are making progress towards a “comprehensive” resolution. EU leaders had managed to lower expectations for the weekend meeting and a plan is not expected until the follow-up summit midweek next week. Stocks rallied mid-week on reports that Germany and France were looking to increase the size of the EFSF.
The bulls grabbed control on Friday after reports indicated that Germany and France are on the same page with regard to a European bailout plan. Overall the US Q3 earnings season has gotten off to a decent start, with about 70% of companies beating EPS estimates.
Reporting continues this week with 40% of the S&P500 companies reporting. The S&P 500 drifted up 1.1% for the week, after melting up past the 1220 resistance, which had been a point of key resistance level at the start of the session and earlier in the week. But the Nasdaq finished down -1.5% for the week after there was somme profit-taking during the week.
Commodities recovered in Friday’s session, with Crude-oil and Gold up 1.5%, while Copper surged 5.4% after testing a critical support level.
All ten company groups that make up the S&P index traded higher with the Materials were up 2.7%, Energy sector were up 1.8%, Financials sector was up 2.6%, Technology sector was up 1.3% , Industrials were up 1.9%, while the Consumer Staples were up 2.8%.
The Dow Jones closed up 2.3% (or 267 points) at 11,809, the S&P 500 index closed up 1.9% (or 23 points) at 1,238, the Nasdaq ended up 1.5% (or 39 points) at 2,637, and the smaller cap Russell 2000 was up 0.3%.
European Markets
European stock markets ended the week optimistically, as equities and the euro rallied on as investors bet that European leaders in crucial weekend meetings will move forward in resolving the eurozone sovereign debt crisis.
Doubts about the ability of European leaders to tackle the crisis eased on Friday after German government sources said there were no serious differences between Germany and France ahead of a closely watched summit on Sunday in Brussels. The addition of a second summit meeting on Wednesday supported investor optimism. For the week the major eurozone indices ended flat.
In London the FTSE 100 index closed up 1.9% (or 104 points) 5,489, the German DAX was up 3.6% (or 205 points) at 5,970 while in France the CAC was up 2.8% (or 87 points) at 3,171.
Asian Markets
Asian stock markets had a cautious close on Friday and were lower for the week. Investors chose caution ahead of the weekend eurozone meeting on the plan to find a solution to the European debt crisis.
In Japan the Nikkei Stock Index ended down -0.8% for the week, as slowing global economic growth forecasts weighed. In Hong Kong the Hang Seng Index was down -2.4% for the week, while the Chinese Shanghai Composite closed the week trading down -4.6% today, and is still sitting near 2-year lows. Chinese Banks shares rose on Friday up around 2%.
There was M&A action in Hong Kong, as Citic Resources Holdings jumped 24% after it accepted a bid from Peabody Energy and ArcelorMittal for its stake in Australia’s Macarthur Coal.
In China the SSE Composite was closed down -0.6% (or -14 points) at 2,317, while in Hong Kong the Hang Seng Index was up 0.2% (or 42 points) at 18,025 and in Japan the Nikkei 225 Index was down -0.1% (or -3 points) at 8,679, South Korean KOSPI was up 1.8% for the session, while the Indian market was down -0.9%.
Commodities
The Dollar Index was lower at 76.28 on a higher Euro, while the Australian Dollar last traded lower at 1.0377. Commodities prices were sharply higher.
For the session the Benchmark crude NYMEX for December delivery was up 1.6% (or $US1.33) settle at $US87.53. Copper prices are seeking a support level as Copper for December delivery was up 5.4% (or 16.5 cents) at $US3.0545. December gold was up 1.4% (or $US23.20) at $US1,640.00.
ASX News Today
MCC- MacArthus says Peabody Energy and ArcelorMittal are close to taking a majority share of Macarthur Coal after more acceptances of its takeover offer (currently have 45%).
MND – Monadelphous Group the engineering firm, has signed new contracts with resources firms including Rio Tinto and Xstrata worth around $230 million.
POH – Phosphagenics the biotech, has raised $24.1 million to fund trials of its patches to manage chronic pain.
PPX – Paperlinx the paper merchant says many of its key markets continue to struggle as worldwide demand for the core papers that Paperlinx distributes declines.
PRY- Primary Health Care jumped to 3-months high after the medical centre owner and pathology provider said it refinanced $1.02 billion of debt.
QAN – Qantas disruption continue as the industrial dispute between Qantas and its engineers is putting Australia’s economy and international reputation at risk, shadow treasurer Joe Hockey says.
TOL – Toll Holding’s long serving managing director Paul Little will be paid an additional $1.5 million when he leaves the company at the end of the year.
VBA – Virgin Australia’s proposed alliance with Singapore Airlines (SIA) has moved a step closer after regulators in Singapore gave the tie-up the green light.
WES – Wesfarmers said its Coles brand sales improved, with the supermarket chain delivering an 8 percent sales increase in the first quarter, notching up 13 consecutive quarters of growth. The Coles result was slightly ahead of market expectations.
WOW – Woolies had its lowest close since July 2004. Woolworths will release their first-quarter sales figures next week.
WPL – Woodside Petroleum the oil and gas major has posted a 1 percent fall in third-quarter production from the June quarter due to planned maintenance, and says it continues to build on dialogue with the East Timor government on its Sunrise project. Woodside said its quarterly output totaled 16.1 millions of barrels of oil equivalent (down from 16.6), and it continues to expect full year production at 62 to 64 mmboe, excluding output from Pluto. Revenues for the quarter rose by 27 percent as higher commodity prices offset lower production levels.
Local Corporate Reporting
Resource Generation (RES) Full year 2011 AGM
WHK Group Ltd (WHG) Full year 2011 AGM
Bendigo and Adelaide Bank (BEN) Full year 2011 AGM
Origin Energy Ltd (ORG) Full year 2011 AGM
Wotif com Holdings (VBA) Full year 2011 AGM
Mirabela Nickel Ltd (MBN) September Quarterly Activities Report
Ex-dividend Date
HMC – Hydromet Corp
Market Summary
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index up 2.1%
Gold Stocks Index up 2.3%
Oil Stocks Index up 2.1%
US ADRs – Broadly Higher!!…
BHP up 3.4% & RIO up 5.3%; AWC 0.9%
ANZ up 2.0% & NAB up 3.0%
NEM up 1.6%, JHX up, NWS up 2.0%
By Michael Hevern
Head of Research
Written on 24 October, 7:15am
