*** 9:45am: News Update: The Greek parliament just passed the latest proposed austerity plan with a majority voting Yes ***
* US stock markets had their worst session for 2012 on Friday, as debt troubles in the eurozone resurfaced.
* European stock markets generally ended in the red on Friday night, as debt concerns resurfaced.
* Asian stock markets finished generally lower on Friday, as eurozone finance ministers withheld approval for a second bailout in Greece.
* Commodities prices traded lower, as gold prices traded around $US1,720, while crude-oil closed up around $US99.
The SPI Futures is trading above the key pivot level of 4230, ending down -0.5% (or 19 points) at 4,199. The key levels for our index this week are 4150 to 4280.
Australian shares closed lower on Friday, led down by the mining sector as investors reduced risk exposure in their portfolios. The Reserve Bank has lowered its inflation and growth forecasts for the first half of 2012 as uncertainty about the European debt crisis weighs on domestic household and business spending. The RBA expects underlying inflation to be 2.25 per cent for the year to the end of June (down 0.25 basis points from the previous forecast), also GDP growth forecasts have been lowered for the year to June to 3.5 percent (down from 4.0 percent).
Markets fell sharply in the US and Europe on Friday night. The Aussie reporting season continues today and traders should be looking to protect recent profits.
See below for ASX listed companies in the news today.
US Markets
US stock markets has their worst session for the year on Friday, as debt troubles in the eurozone resurfaced.
The markets sold off sharply on the open. All 10 of the S&P’s sectors were lower, led down by materials and energy, as commodities came under pressure. However for the year the Dow Jones is up 4.8%, while in the S&P500 is up 6.7% and the tech-heavy Nasdaq continues to outperform up 11.5%.
US traders sold down shares on the back of news that eurozone finance ministers did not approve a second bailout that Greece needs in order to stay afloat, and are waiting for a crucial vote by the the Greek Parliament on Sunday night which must first approve the austerity measures before they qualify for the bailout monies. Also weighing on sentiment was the S&P downgrade of Italian banks as they highlighted their issues with sovereign debt.
In economic news the US trade deficit in December was $48.8 billion (slightly wider than expected), while the University of Michigan’s consumer-sentiment survey for February came in at 72.5 (below the weaker than the 75 expected).
In corporate news UPS, the United Parcel Service, boosted its quarterly dividend by 9.6%, saying cash flow in 2012 is expected to be strong, while LinkedIn rose 18%, after the company reported better-than-expected 4Q earnings and revenue, and provided an upbeat forecast for the rest of the year.
All ten company groups that make up the S&P index traded lower, with Materials down -1.8%, Energy down -1.0%, Financials down -1.0%, Industrials down -0.7%, Technology down -0.8%, while Consumer Staples were down -0.5%.
The Dow Jones closed down -0.7% (or -89 points) at 12,801, the S&P 500 index down -0.7% (or -9 points) at 1,343, the Nasdaq ended down -0.8% (or -23 points) at 2,904 and the smaller cap Russell 2000 was down -1.4%.
European Markets
European stock markets generally ended in the red on Friday night, as debt concerns resurfaced. The Stoxx Europe 600 index closed down -0.9%. Traders sold down shares on the back of news that eurozone finance ministers did not approve a second bailout, which Greece needs in order to stay afloat.
There will be a crucial vote by the the Greek Parliament on Sunday night, which must first approve the austerity measures before they qualify for the bailout monies. Also weighing on sentiment was the S&P downgrade of 34 of the 37 Italian banks it covers, highlighting their issues with sovereign debt.
Eurozone sentiment was weighed down, as uncertainty over Greece resurfaced after eurozone finance ministers held off on approving Greek second bailout. Traders were nervous as the Greek parliament has yet to approve the austerity measures and the Greek Prime Minister Lucas Papademos will likely reshuffle his cabinet on Monday, following the resignation of six cabinet members in protest over new austerity measures demanded by the country’s international creditors.
In London the FTSE 100 index closed down -0.7% (or -43 points) at 5,852, the German DAX was down -1.4% (or -96 points) at 6,693 while in France the CAC was down -1.5% (or -52 points) at 3,373. Spain was down -1.2% and Italy ended down -1.8%.
Asian Markets
Asian stock markets finished generally lower on Friday, as eurozone finance ministers withheld approval for a second bailout in Greece, calling for the Greek parliment to formally approve the recently proposed austerity measures before more bailout funds would be released.
Growth-sensitive stocks eased as commodity prices fell, while financials were mostly lower across the region following the latest developments in Greece.
China bucked the trend finishing modestly higher. Chinese trade surplus widened more than expected in January amid a sharp drop in imports, but analysts suggested the data includes some holiday-related distortions rather than a deterioration in underlying economic trends.
In China the SSE Composite closed up 0.1% at 2,461, while in Hong Kong the Hang Seng Index was down -0.1% (or -8 points) at 21,010 and in Japan the Nikkei 225 Index closed down -0.2% (or -13 points) at 9,002. The South Korean KOSPI was up 0.5% for the session, while the Indian market up 0.7%.
Commodities
The Dollar Index was lower at 78.60 on higher a Euro, while the Australian Dollar last traded lower at 1.0735. Commodities prices traded higher.
For the session the Benchmark crude NYMEX for March delivery was up 1.0% (or $US1.01) to settle at $US99.72. Copper prices are seeking a support level as Copper for February delivery was up 1.8% (or 6.9 cents) at $US3.9730. February gold was up 0.1% (or $US0.50) at $US1,730.
ASX News Today
ANZ – ANZ Bank is the first to increase interest rates, raising its variable interest rates for retail mortgages and small business loans by 0.06 per cent.
CNX – Carbon Energy has become the first Australian company to export power generated by syngas into a commercial electricity grid from its underground coal gasification (UCG) plant at Bloodwood Creek, near Dalby, Queensland.
CWN – Crown, which owns a third of Macau joint venture Melco Crown Entertainment, will benefit from Melco blockbuster results where 4Q profits rocketed 560 percent, with revenues up 30%. Deutsche analysts expect Crown will report a 32 percent increase in normalised net profit for the December half.
JHX – James Hardie will receive more than $300 million after winning a legal dispute with the Australian Taxation Office (ATO).
LEI – Construction company John Holland has been awarded a $220 million contract to build works at a Queensland coal terminal.
NCK – Nick Scali, the furniture retailer, has reported an 11 percent drop in profits for the second half of last year as expansion costs offset increased sales revenue.
NCM – Newcrest Mining’s first-half profit has grown by 50 per cent to a record high, buoyed by surging prices for gold, silver and copper.
TSE – Transfield Services says its net profit for the 2012 financial year will be towards the lower end of its previous forecasts.
Corporate News
Reporting today:
Coalspur Mines Ltd (CPL) Interim 2012 Results
JB Hi-Fi Ltd (JBH) Interim 2012 Results
Leighton Holdings (LEI) Interim 2012 Results
Market Summary
ASX – to open lower
US & UK/Europe – lower
Commodities Stock Index down -1.8%
Gold Stocks Index down -1.8%
Oil Stocks Index down -1.0%
US ADRs – Broadly Lower
BHP down -3.8%, RIO down -2.3%; AWC down -5.5%
ANZ down -3.2% & NAB down -2.1%
NEM down -1.7%, JHX down -3.9%, NWS down -0.6%
By Michael Hevern
Head of Research
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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
