* US stock markets drift higher to levels not seen since mid last year.
* European stock markets climbed to 5-month highs overnight, as the US Federal Reserve said it would keep U.S. interest rates low until at least 2014.
* Many Asian stock markets are closed for the Lunar New Year holidays.
* Commodities prices traded mostly lower, as Gold prices lower to around $US1,668 and while crude-oil closed up around $US100.
The SPI Futures is trading above the key pivot level of 4180, ended down -0.3% (or -11 points) at 4,240. The key levels for our index today are 4150 to 4230.
The Australian share market continued to melt-up Wednesday, led by strong moves in the financials sector. Investors remain optimistic, even though the negotiations over the Greek bailout have not been concluded and the US Fed reserve meet tonight. Locally the case for a rate cut when the RBA board meets on 7th February, has been boosted by today’s CPI reading and some internet jobs figures. The ABS reported that inflation was unchanged for the December quarter, following a 0.6 per cent rise in the third quarter of 2011. Seasonally adjusted CPI rose 0.2 per cent in the December quarter, and was up 3.0 per cent in the 12 months to December. This is the reading is the lowest since the final three months of 2008 at the height of the GFC. In other news the Westpac-Melbourne Institute Leading Indexes of Economic Activity forecast a modestly lower pace of economic activity in the next 3 to 9 months, as the index fell -0.2 percent in November, following a rise of 0.1 percent in October. The Department of Education, Employment and Workplace Relations internet vacancy index fell by 3 per cent in December, was 84.1 points, 8.7 percent, lower in seasonally adjusted terms than in December 2010. Shares in the All Ordinaries (XAO) traded higher today, closing up 1.0% at 4329, as the S&P/ASX 200 (XJO) closed up 1.1% at 4271.
Aussie shares are expected to play catch up today and traders are expected to continue to look for bargains today, after positive leads from the US and European markets.�
See below for ASX listed companies in the news today.
US Markets
US stock markats eased after an initial surge. Investors had cheered the Federal Reserve’s pledge to hold down interest rates till 2014.
The Dow Jones Industrial Average reached its highest level since May 2008 holding around 12,700, while in the broader market the S&P 500 held above 1300 and the Nasdaq outperformed aroud 2800.
Profit takers stepped in after some disappointing economic data and corporate earnings reports. Selling began after data showed sales of new homes unexpectedly fell 2.2% in December (versus expectation of a rise of 1.9%) and also the Conference Board’s leading economic index rose 0.4% in December (below estimates of a 0.7% rise). In corporate news AT&T, E*Trade Financial, SanDisk, Logitech International and Colgate-Palmolive earnings disappointed.
However there was positive news with weekly jobless claims coming in-line with expectations, rising 21,000 to 377,000 and orders for long-lasting goods surging 3% in December (above estimates of 2%).
All ten company groups that make up the S&P index traded down with the Materials down -0.2% , Financials sector down -1.0%, Energy sector was down -1.3%, Industrials sector was down -0.2%, Technology was down -0.8%, while Consumer Staples were down -0.6%.
The Dow Jones closed down -0.2% (or -22 points) at 12,734, the S&P 500 index down -0.6% (or -8 points) at 1,318, the Nasdaq ended down -0.5% (or -13 points) at 2,805 and the smaller cap Russell 2000 was down -0.3%.
European Markets
European stock markets climbed to 5-month highs overnight, as the US Federal Reserve said it would keep U.S. interest rates low until at least 2014. The Stoxx 600 index gained 1.1%.
Across the region banking and mining shares performed well in the back of the news from th US Fed. Italian banck jumped over 5% and in London banks rose around the same. Resource stock surged with Kazakhmys up 7.8%, Rio Tinto rose 4.8% and Fresnillo was up 3.1%.
Investors are still awaiting for news of progress in negotiations between Greece and its private creditors, as the parties resumed talks over the det crisis. The Greek market jumped 4.4%, outperforming the rest of the eurozone, while the Italian market rose as the government sold EUR5 billion of 2-year debt at lower borrowing costs.
In London the FTSE 100 index closed up 1.2% (or 70 points) at 5793, the German DAX was up 1.8% (or 118 points) at 6,539 while in France the CAC was up 1.5% (or 50 points) at 3,363, Spain was up 1.2% and Italy ended up 1.2%.
Asian Markets
Many Asian stock markets are closed for the Lunar New Year holidays.
Hong Kong stocks jumped though, as traders returned from a long Lunar New Year holiday to celebrate the Federal Reserve’s projection of ultra-low interest rates through late 2014. Japanese shares eased from a near three-month high as investors did some profit-taking, paricularly in the exporters, while in South Korea the Kospi eased on weaker-than-expected economic growth data.
In China the SSE Composite was closed at 2,319, while in Hong Kong the Hang Seng Index was up 1.6% at 20,439 and in Japan the Nikkei 225 Index closed down -0.4% (or -34 points) at 8,850, South Korean KOSPI was up 0.2% for the session, while the Indian market up 0.5%.
Commodities
The Dollar Index was lower at 79.41 on a higher Euro, while the Australian Dollar last traded higher at 1.0622. Commodities prices traded lhigher.
For the session the Benchmark crude NYMEX for January delivery was up 0.3% (or $US0.39) settle at $US99.79. Copper prices are seeking a support level as Copper for January delivery was up 1.5% (or 6 cents) at $US3.8805. January gold was dowup 1.6% (or $US26.50) at $US1,729.
ASX News Today
AIO – Asciano has restructured its Patrick ports division, resulting in a significant reshuffle of its executive team.
AGO – Atlas Iron managing director David Flanagan delivered downgraded production and export results for the December quarter and has cut its production targets for the financial year because of the impact of Tropical Cyclone Heidi, the MD Mr Flanagan says he is committed to building Atlas into an iron ore force in its own right.
ALS – Alesco Corporation the building products distributor has more than tripled its first half profit but says trading conditions are tough and will continue to be so.
CPA – Commonwealth Property Office Fund expects its first-half profit to grow and has boosted its forecasts for distributions.
EPW – ERM Power has received the go-ahead to build a $500 million gas-fired power station west of Brisbane.
LYC – Lynas Corp is back, surging another 5% after reporting it has secured enough funds ($US225 million in unsecured convertible bonds) to complete construction and start-up of its delayed rare earths processing plant in Malaysia.
WHC – Whitehaven Coal has increased production by two per cent in the December quarter, but sales have fallen.
Market Summary
ASX – to open higher
US & UK/Europe -mixed
Commodities Stock Index down -0.6%
Gold Stocks Index up 0.7%
Oil Stocks Index down -1.6%
US ADRs – Broadly Lower!!…
By Michael Hevern
Head of Research
Tags: Asian Markets, ASX, ASX News, Business News, Commodities, Crude Oil, European Markets, Ex Dividend, gold price, Nasdaq, Stock Market Analysis, stockmarket, trading, US Market wrap
This entry was posted
on Friday, January 27th, 2012 at 9:52 am and is filed under Morning Wrap, Stock Market Analysis.
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