* US stock markets traded sideways but there were some moves with the energy sector, down around -1%, while the financials outperformed up 1.2%. Stocks generally held in a holding pattern ahead of the EU summit later in the week.
* European stock markets ended lower overnight, as traders focused on the upcoming EU summit and indications by German leaders that they will object to rumoured plans to boost the size of the eurozone’s bailout fund (EFSF).
* Asian stock markets generally rose yesterday, as traders positioned themselves ahead of the “pivotal” EU summit set for later this week in Brussels.
* Commodities prices traded mixed, as Gold prices moved higher to $US1,741 and crude-oil closed around $US100.
The SPI Futures is trading above the key pivot level of 4180, ending down -0.2% (or -8 points) at 4,300. The key levels for our index this week are 4250 to 4350.
Yesterday Australian shares recovered from the late session sell-off of previous sessions, but bank customers are still awaiting action from the big four banks on whether they will pass on the full 25 basis point rate cut. The Reserve Bank’s rate cut has been welcomed by retailers, although some economists believe it has come too late to save Christmas trading season.
The Australian Bureau of Statistics (ABS) released GDP figures yesterday which showed gross domestic product (GDP) increased by 1 percent in the September quarter, after an upwardly revised 1.4 percent rise in the June quarter. The figures showed that Western Australia accounted for almost half of the GDP growth, as the state’s final demand soared 8.4 percent in the September quarter. Mining business investment surged and household consumption surprised to the upside, with investment up 6 percent in the quarter, and up 8.7 percent over the year. Nationally the GDP grew 2.5 percent in the year to September, which is among the highest in the developed world, but the breakdown by state was remarkable, as for the year to September WA’s final demand surged 16.4 percent, while growth in the other states was paltry by comparison, with NSW growing 1.2 percent and Victoria growth up 1.8 percent.
Shares in the All Ordinaries (XAO) generally eased again yesterday, closing up 0.7% at 4351, as the S&P/ASX 200 (XJO) closed up 0.7% at 4293.
Aussie traders are expected to show caution today, after the mixed leads from the US and European markets, as traders fears over the eurozone debt crisis continue to bubble under the surface.
See below for ASX listed companies in the news today.
Economics News Today
* Nov Australian Unemployment (current 5.2%)
US stock markets traded sideways but there were some moves with the energy sector down around -1%, while the financials outperformed up 1.2%. Stocks generally held in a holding pattern ahead of the EU summit later in the week. The Dow Jones Index actually finished in the positive for a third straight session, while in the broader markets the S&P 500 and Nasdaq ended flat. Stocks were held captive by news out of Europe, both positive and negative. There were rumours that the Group of 20 industrialised nations was considering a lending program of budgeting $US600 billion for Europe through the International Monetary Fund (IMF) but they were denied later.
Economic news out of the US continues to beat expectations, with the latest consumer credit figures rising $US7.65 billion in October (ahead of the $6.5 billion forecast).
In commodities prices were mixed with crude-oil prices lower and gold higher.
The ten company groups that make up the S&P index traded generally modestly higher, with Materials up 0.9%, Energy down -0.9%, Financials outperforming up 1.2%, Industrials flat, Technology up 0.1%, while Consumer Staples were up 0.6%.
The Dow Jones closed up 0.4% (or 46 points) at 12,196 the S&P 500 index closed up 0.2% (or 3 points) at 1,261, the Nasdaq ended flat at 2,649 and the smaller cap Russell 2000 was flat.
The major European indices generally eased. European Union leaders are set to meet late Thursday and Friday in Brussels in yet another critical summit for the eurozone, in which the German Chancellor Angela Merkel and French President Nicolas Sarkozy have proposed changes that would result in more robust fiscal rules and impose automatic sanctions on countries that violate budget limits. However Germany is now sending mixed signals and is attempting to down play what can be expected to result from the meeting.
In London the FTSE 100 index closed down -0.4% (or -22 points) at 5,547, the German DAX was down -0.6% (or -34 points) at 5,994, while in France the CAC was down -0.1% (or -4 points) at 3,176. Spain was down -0.8% and Italy ended down -1.2%.
Asian stock markets generally rose yesterday, as traders postioned themselves ahead of the “pivotal” EU summit set down for later this week in Brussels.
In Hong Kong the Hang Seng Index rose 1.6%, while in China the Shanghai Composite Index rose modestly, but continues to languish around 2-year lows. The gains were modest across the board with property stocks trading higher and resource stocks staging a minor recovery.
In China the SSE Composite closed up 0.3% (or 7 points) at 2,332, while in Hong Kong the Hang Seng Index was up 1.6% (or 298 points) at 19,240 and in Japan the Nikkei 225 Index closed up 1.7% (or 140 points) at 8,722. The South Korean KOSPI was up 0.9% for the session, while the Indian market was up 0.4%.
The Dollar Index was lower at 78.40 on a higher Euro, while the Australian Dollar last traded lower at 1.0297. Commodities prices traded mixed.
For the session the benchmark crude NYMEX for December delivery was down -0.7% (or -$US0.70) to settle at $US100.58. Copper prices are seeking a support level as Copper for December delivery was down -0.7% (or -2.4 cents) at $US3.5412. December gold was up 0.8% (or $U13.00) at $US1,741.
ASX News Today
AZT- Aston Resources’s billionaire owner Nathan Tinkler says the coal explorer and coal miner Whitehaven Coal have entered into talks about a $5 billion potential merger that analysts say would create a powerful entity.
BOQ – Bank of Queensland (BOQ) has had its S&P issuer credit rating downgraded from BBB+ to BBB.
BEN – Bendigo and Adelaide Bank had its S&P issuer credit rating upgraded from BB+ to A-.
DJS – David Jones the upmarket retailer is now forecasting profit will fall in the first half of this financial year by up to 20 percent.
ORI – Orica says another leak has occurred at the Orica chemical plant near Newcastle, saying there was a small overflow of weak ammonium nitrate solution from a tank bund on the site.
SUN – Suncorp-Metway’s S&P issuer credit rating remains steady.
Local Corporate Reporting
Bank of Queensland (BOQ) Full year AGM
ASX – to open flat
Commodities Stock Index up 1.1%
Gold Stocks Index down -0.4%
Oil Stocks Index up 1.2%
US ADRs – Broadly Mixed
By Michael Hevern
Head of Research