* US stock markets have recovered from an early sell-off ending modestly lower for the session.
* European stock markets fell overnight as investors grew increasingly concerned about the lack of a Greek debt-restructuring deal.
* Asian markets fell yesterday as investors were cautious ahead of a key summit of European leaders later in the day and Chinese PMI out Wednesday.
* Commodities prices traded mostly lower, as Gold prices dropped to around $US1,730, while crude-oil closed up around $US99.
The SPI Futures is trading above the key pivot level of 4180, ended down -0.2% (or -7 points) at 4,238. The key levels for our index today are 4180 to 4230.
Last week the Australian share market ended up for a fourth consecutive week, with shares up around 5.5 percent so far in 2012.
Yesterday Aussie shares fell, led down by the financials, as investors waited for news on Europe debt talks.
Aussie shares are expected to ease today and traders are should be looking to protect recent profits, after weaker leads again from the US and European markets.
See below for ASX listed companies in the news today.
Economics News Today
* Dec Financial Aggregates, including Private Sector Credit�
* Dec NAB Business Survey�
* Dec International Reserves & Foreign Currency Liquidity.
US Markets
US stock markets have recovered from an early sell-off ending modestly lower for the session. Traders are showing concern that the standoff between Greece and its private creditors is still not resolved, as well as an alarming surge in Portugal’s borrowing costs.
Financial companies led stocks lower as investors remain wary of the potential for Europe’s debt issues to spread causing contagion across the global financial system. Eight of 10 sectors on the S&P 500 finished in the red for the session, with the only exceptions being the telecommunication and technology sectors. Trading volumes were down as fund managers are looking to hold on to their January profits as the month end nears.
The ten company groups that make up the S&P index traded mixed with Materials down -0.2%, Financials down -0.9%, Energy down -0.5%, Industrials down -0.4%, Technology up 0.3%, while Consumer Staples were down -0.3%.
The Dow Jones closed down -0.1% (or -6 points) at 12,654, the S&P 500 index down -0.3% (or -3 points) at 1,313, the Nasdaq ended down -0.2% (or -5 points) at 2,811 and the smaller cap Russell 2000 was down -0.6%.
European Markets
European stock markets fell overnight as investors grew increasingly concerned about the lack of a Greek debt-restructuring deal. The Stoxx Europe 600 Index closed down -1.1%. All the key markets were down over -1% for the session.
Across the region the financials led the sell-down with the Stoxx Europe 600 Index Banking sector closing down -3.1%. Investors were worried due to Friday’s Fitch ratings agency downgrade of Italy, Spain, Belgium, Slovenia and Cyprus and cut its outlook in Ireland.
Investors are concerned over the Greek debt negotiation and are now shifting their attention to Portugal, which could be the next in line for a bailout after their borrowing costs surged with the 10-year government bond yield reaching euro-era highs, with the 10-year Portuguese government bond yield at 17.39%.
The meeting of the European Union leader’s summit is underway in Brussels. It aims to endorse a permanent bailout fund with a lending capacity of EUR500 billion, and to finish details of a “fiscal pact” aiming at budget deficits. There is some good news as all European Union countries, except Britain and the Czech Republic, have agreed to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc’s disastrous debt crisis, while also pledging to stimulate growth across the region. The eurozone’s 17 nations hope that the tighter rules will convince investors that all countries will get their debts under control and restore confidence in their joint currency.
In London the FTSE 100 index closed down -1.1% (or -62 points) at 5672, the German DAX was down -1.1% (or -67 points) at 6,444 while in France the CAC was down -1.6% (or -53 points) at 3,265. Spain was down -1.6% and Italy ended down -1.2%.
Asian Markets
Asian stock markets fell yesterday as investors were cautious ahead of a key summit of European leaders later in the day and Chinese PMI out Wednesday. Japanese stocks closed lower.
Chinese traders returned in a sombre mood and sold down stocks, due to disappointment over a lack of policy easing from the government. The Hong Kong market was also lower, as shares of developers and Chinese banks fell sharply on fears over the property sector’s outlook in the absence of any policy easing. The Taiwanese market bucked the trend, rising sharply as the market returned after a long Lunar New Year holiday.
In China the SSE Composite closed down -1.5% at 2,285, while in Hong Kong the Hang Seng Index was up -1.7% at 20,160 and in Japan the Nikkei 225 Index closed down -0.5% (or -48 points) at 8,793, while the Indian market was down 2.2%.
Commodities
The Dollar Index was lower at 78.36 on a higher Euro, while the Australian Dollar last traded higher at 1.0667. Commodities prices traded lower.
For the session the benchmark crude NYMEX for January delivery was down -0.6% (or -$US0.63) to settle at $US98.93. Copper prices are seeking a support level as Copper for January delivery was down -1.6% (or -6.4 cents) at $US3.8263. January gold was down -0.1% (or -$US1.70) at $US1,730.
ASX News Today
GGP – Golden Gate Petroleum, with a market cap of just $44 million, says it no longer needs to raise further capital and is forecasting Golden Gate will produce close to 1000 barrels of oil a day, in the next 9 months.
OST – OneSteel will receive $64 million to help it prepare for the introduction of the federal government’s carbon tax in July.
ROC – ROC Oil lifted production in the December quarter, but for the year it was down. 4Q production increased by 7 percent on the previous quarter to 708,675 barrels of crude oil, bringing full-year total to 2.73 million barrels of oil equivalent, compared to 3.1 mmboe in 2010.
WES – Wesfarmers to release second-quarter sales figures on Thursday.
WOW – Woolworths, Australia’s biggest supermarket chain, releases second-quarter sales figures today. Woolworths has appointed Christine Cross, David Mackay and Michael Ullmer as non-executive directors.
Ex-dividend Date
None
Market Summary
ASX – to open lower
US & UK/Europe – lower
Commodities Stock Index down -0.5%
Gold Stocks Index down -1.3%
Oil Stocks Index down -0.1%
US ADRs – Broadly Lower
BHP down -0.9% & RIO down -0.2%; AWC down -1.1%
ANZ down -0.9% & NAB down -1.4%
NEM down -0.5%, JHX down -2.3%, NWS up 0.3%
By Michael Hevern
Head of Research
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