Online Stockmarket Trading Update

*  US stock markets rose to multiyear highs overnight, surging late in the session after early stress-test results from a pair of the largest US banks.  The VIX index hits 4-year lows.Â
*  European stock markets rallied overnight, on improving economic news. The Stoxx Europe 600 index ended down 0.2%.
*  Asian stock markets rallied yesterday as banks and mining stocks rose.
*  Commodities prices eased, with Gold prices trading around $US1,693, while crude-oil closed around $US106.

The SPI Futures is trading above the key pivot level of 4180, ending up 1.0% (or 43 points) at 4,293. The key levels for our index this week are 4230 to 4320.

Australian shares are expected to bounce today, as materials, financials and industrials stocks all jumped higher on overseas markets overnight. Markets are above key levels in the US and European markets overnight, as the Fed is “upbeat” on the US economy.

See below for ASX listed companies in the news today.

US Markets

US stock markets rose to multiyear highs overnight, surging late in the session after early stress-test results from a pair of the largest US banks.

The Dow Jones Industrial Average had its largest gain for the year, and closed at its highest since December 2007.  In the broader market the S&P500 index closed at its highest level since June 2008, while the Nasdaq Composite has its first close above 3000 since November 2000.    

The financials sector surged as investors cheered the reports that JPMorgan and Bank of America passed the U.S. Federal Reserve’s stress tests. 15 of the 19 banks stress tested passed, while Citi Bank was one of the ones that failed.  JPM and BofA jumped over 6.3% for the session.  The Federal Open Market Committee (FOMC) took no new action and offered few hints about the potential for additional monetary-stimulus efforts as expected, but they did highlight that the US economy is improving.  In economic news data showed that sales at US retailers rose at the fastest pace in five months in February and small-business optimism rose for the sixth straight month, to the highest level since December 2007.   

The bulls are pushing the market above key levels around the globe as the monetary easing policies of the US and the EU are seeing funds pour into equities as investors seek higher returns.  

All ten company groups that make up the S&P index traded higher, with Materials up 1.7%, Energy up 1.2%, Financials up 3.9%, Industrials up 2.1%, Technology up 1.9%, while Consumer Staples were up 1.6%.

The Dow Jones closed up 1.7% (or 217 points) at 13,177, the S&P 500 index up 1.8% (or 24 points) at 1,396, the Nasdaq ended up 1.9% (or 56 points) at 3,039 and the smaller cap Russell 2000 was up 2.1%.

European Markets

European stock markets rallied overnight, on improving economic news. The Stoxx Europe 600 index closed 1.8% at its highest level since July.  Across the region the banks led the gains after the closely watched Center for European Economic Research (ZEW), gauge of German investor sentiment jumped to 22.3 in March from 5.4 in February, its highest level since June 2010.  

Trader sentiment was also boosted by US retail sales which saw their fastest climb in five months in February. The eurozone finance ministers also finalised the second bailout deal for Greece after the country succeeded in restructuring its debt and will be formalised at the meeting of deputy finance ministers on Wednesday.  The German market broke resistance closing at its highest level since last July, while the FTSE is at levels not seen since last June.

In London the FTSE 100 index closed up 1.1% (or 63 points) at 5,956, the German DAX was up 1.4% (or 94 points) at 6,996 while in France the CAC was up 1.7% (or 60 points) at 3,550. Spain was up 2.4% and Italy ended up 2.1%.

Asian Markets

Asian stock markets rallied yesterday as banks and mining stocks rose.

In Japan the Nikkei Index backed off the 10,000 level after the Bank of Japan (BoJ) left its policy rate unchanged and did not announce a further expansion to its asset purchase program, although the central bank expanded a low-cost loan program to help stimulate the economy.  

In Hong Kong and China the markets were led higher by the mining and banking stocks, while steel makers also caught a bid higher as there is a cyclical recovery and a Japanese reconstruction play.  The Chinese Shanghai Composite Index is approaching 4-month highs and the 200 day moving average resistance level. Expect further rises today.

In China the SSE Composite closed up 0.9% (or 21 points) at 2,455, while in Hong Kong the Hang Seng Index was up 1.0% (or 205 points) at 21,339 and in Japan the Nikkei 225 Index closed up 0.1% (or 9 points) at 9,900. The South Korean KOSPI was up 1.1% for the session, while the Indian market closed  up 1.3%.

Commodities

The Dollar Index was higher at 80.15 on a lower Euro, while the Australian Dollar last traded lower at 1.0540. Commodities prices traded lower.

For the session the Benchmark crude NYMEX for April delivery was up 0.4% (or $US0.36) to settle at $US106.72.  Copper prices are bumping against a key resistance level as Copper for March delivery was up 1.4% (or 3 cents) at $US3.8965  April gold was down -1.4% (or -$US23.90) at $US1,693. 

ASX News Today

ALS – Alesco Corporation Ltd enters unconditional agreement to sell Parbury Decorative Surfaces business to private company, Borg Group for $4 million. 

BND – Bandanna Energy Limited is reportedly teaming up with Acacia Coal.

COK – A South Korean firm plans to invest over $300 million to boost its stake in Australian coal miner Cockatoo Coal.

FUN – Funtastic has taken over KP Multinational Pty Ltd for almost $3 million and picked up a licence to manufacture and distribute some LEGO products as part of the deal.

GFF – Goodman Fielder chief executive Chris Delaney to address American Chamber of Commerce in Australia luncheon.

GNC – Glencore International the commodities giant has reportedly bid $5.2  billion for Graincorp’s Canadian rival Viterra, sparking speculation a bid may be made for Graincorp.

GNS – Gunns shares have been suspended from trading on the Australian Securities Exchange (ASX), at the company’s request while it negotiates a capital raising.

MQG – Macquarie Group says a ratings downgrade by Fitch relates to global market issues rather than anything specific to Macquarie.

PDN – Paladin Energy can now start exploring its Canadian assets, after a three-year moratorium on uranium mining was lifted by indigenous landowners.
 

 

Commodities Stock Index  up 1.5%
Gold Stocks Index down -0.6%
Oil Stocks Index up 1.0%  

US ADRs – Broadly Higher

BHP up 2.6%,  RIO up 4.0%; AWC up 5.7%
ANZ up 2.3% & NAB up 2.4%
NEM  down -1.0%, JHX up 1.8%, NWS up 2.5%

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 Wednesday, March 14th, 2012 at 9:43 am and is filed under ASX Trading News, Morning Wrap, Stock Market Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.