* US stock markets clawed back to finish flat for the session.
* European stock markets fell overnight, as traders questioned the ECB rescue operation.
* Asian stock markets generally rallied yesterday, with traders taking their lead from the US, but trading volumes were thin as many traders have ruled off their books as we approach the end of the year.
* Commodities prices traded higher. Gold prices rose to around $US1,600, while crude-oil closed around $US94.
The SPI Futures is trading above the key pivot level of 4180, ending down -0.1% (or -4 points) at 4,107. The key levels for our index today are 4080 to 4180.
Aussie traders are expected to trade cautiously again and to stay defensive today, after the mixed leads from the US and European markets, and the added concern over possible destabilising politicking in the Korean Penninsular. Note that in 7 out of 10 years on average the markets rise around 4.9% in the last 2 weeks of Decemeber. Remember options expiry is today.
See below for ASX listed companies in the news today.
US stock markets clawed back to finish flat for the session. Stocks initially sold-off as traders started to question how banks will use the ECB bailout funds, as the eurozone financial system threatens to grind to a halt.
The Dow Jones held above 12,000, as the index had run up 2.9% in the previous session, which was one of its biggest gains of the year. In the broader markets technology stocks weighed on sentiment, after disappointing earnings from database developer Oracle, which triggered selling in the tech major IBM, which lost -3.7%, while Cisco Systems fell -2.9% and Hewlett Packard shed -2.3%. The defensive sectors outperformed with traders pushing utilities and consumer staples stocks higher. Energy stocks also held favour.
Most of the company groups that make up the S&P index traded higher, with Materials up 0.3%, Energy up 1.1%, Financials up 0.6%, Industrials up 0.1%, and Consumer Staples up 0.3%, while Technology was down -1.6%.
The Dow Jones closed up 0.1% (or 4 points) at 12,108, the S&P 500 index closed up 0.1% (or 2 points) at 1,244, the Nasdaq ended down -1.0% (or -27 points) at 2,578 and the smaller cap Russell 2000 was up 0.3%.
European stock markets fell overnight, as traders questioned the European Central Bank (ECB) rescue operation. The Stoxx Europe 600 index fell -0.5%.
Stock prices eased after the ECB generated a bigger-than-expected EUR489 billion in three-year low interest loans, taken up by 523 eurozone banks in the first of two refinancing operations. Debt concerns resurfaced after traders questioned whether the ECB’s three-year funding operation would be adequate to restore liquidity in the eurozone financial system, as many of the banks that took up the offer are expected to use the funds to shore up their balance sheets rather than offer to loan the funds out to finance business operations and boost economic activity.
In London the FTSE 100 index closed down -0.6% (or -30 points) at 5,390, the German DAX was down -0.9% (or -55 points) at 5,791 while in France the CAC was down -0.8% (or -25 points) at 3,030. Spain was down -0.9% and Italy ended down -0.9%.
Asian stock markets generally rallied yesterday, as traders took their lead from the US, but trading volumes were thin as many have ruled off their books as we approach the end of the year.
Improving economic data in the US and and news of the ECB offering boosted sentiment. However the Chinese market gave up early gains to finish lower yet again and is still close to 3-years lows. Traders continue to be concerned that the Chinese economy is slowing.
In China the SSE Composite closed down -1.1% (or -25 points) at 2,191, while in Hong Kong the Hang Seng Index was up 1.9% (or 336 points) at 18,416 and in Japan the Nikkei 225 Index closed up 1.5% (or 123 points) at 8,460. The South Korean KOSPI was up 3.1% for the session, while the Indian market was up 3.4%.
The Dollar Index was higher at 79.98 on a lower Euro, while the Australian Dollar last traded lower at 1.009. Commodities prices traded mixed.
For the session the benchmark crude NYMEX for December delivery was up 1.7% (or $US1.65) to settle at $US98.89. Copper prices are seeking a support level as Copper for December delivery was up 2.2% (or 2.2 cents) at $US3.850. December gold was down -0.2% (or -$US3.70) at $US1,612.
ASX News Today
ASB – Austal says the company has won $US7.9 million in additional work for the US Navy.
BSL - BlueScope Steel welcomes the advancing of a $100 million payment it will receive from the federal government under the Steel Transformation Plan.
HTA – Vodafone has been put on notice by the communications watchdog over the leaking of personal customer details earlier this year.
LLC – Lend Lease and Leighton Holdings will joint venture to carry out $505 million worth of rail work in Victoria.
MAH – Macmahon Holdings the engineering firm has finalised the contract terms with Fortescue Metals Group for the construction of the Solomon Rail project.
QRX – QRxPharma the pain treatments developer has formed a partnership with a major pharmaceuticals company to bring its leading development to market in the United States.
TCL – Transurban has confirmed the NSW government will go ahead with a $400 million major upgrade of the M5 toll road in Sydney’s south west.
UGL – UGL the engineering firm has secured $176 million worth of work with Victoria’s Regional Rail Link Authority.
Charter Hall Retail
ALE Property Group
ASX – to open flat
US & UK/Europe – mixed
Commodities Stock Index up 5.9%
Gold Stocks Index down -0.4%
Oil Stocks Index up 0.9%
US ADRs – Broadly Higher
By Michael Hevern
Head of Research
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