* US stock markets recovered from an early sell-off overnight, as buyers stepped into financial and defensive stocks.
* European stock markets rebounded overnight, recovering from an initial sell-off in the wake of weekend election results in France and Greece.
* Asian stock markets slumped yesterday, taking their lead from the US and eurozone traders, but we should see some bargain hunting today.
* Commodities prices were lower, with Gold prices traded around $US1,639 while crude-oil closed around $US97.
The Australian market is expected to recover today, particularly our dividend stocks. Markets bounced and finished well off their lows in the European markets and in the US. We have the Federal Budget night.
The SPI Futures is trading above the key pivot level of 4300, ended up 0.6% (or 38 points) at 4,323. The key levels for our index today are 4320 to 4380.
See below for ASX listed companies in the news today.
US stock markets recovered from an early sell-off overnight, as buyers stepped into Financial and defensive stocks.
The Dow industrials ended lower for a fourth session and finished just above 13,000. In the broader markets the S&P500 and the Nasdaq finished flat for the session, with the Financials sector offering support. Traders in effect shrugged off the largely expected results of the European elections, and saw some bargain hunting after Friday’s sell-off due to the disappointing Non-Farms Employment report, as US stocks bounced back after European markets mostly wiped out their session losses to trade higher.
In economic news, US consumer credit expanded in March at the fastest rate in more than a decade.
All ten company groups that make up the S&P index traded sharply lower, with the Materials down -1.7% , Energy sector was down -2.3%, Financials sector down -1.6%, Industrials sector was down -1.4%, Technology was down -2.1%, while Consumer Staples were down -1.9%.
The Dow Jones closed down -1.3% (or -168 points) at 13,038, the S&P 500 index down -1.6% (or -22 points) at 1,369, the Nasdaq ended down -2.3% (or -68 points) at 2,956 and the smaller cap Russell 2000 was down -1.8%.
European stock markets rebounded overnight, recovering from an initial sell-off in the wake of weekend election results in France and Greece. The Stoxx Europe 600 index rose 0.7%.
The recent political developments will create a challenge to the agreements reached by European Union leaders to cut deficits through reduced spending going forward, which the German government is pushing as a pre-requisite for the bailouts in weaker economies such as Greece, Spain and Italy.
The results of the weekend-election results were largely expected, however the Greek election results are worrying as the public-debt restructuring in March may be in jeopardy. The Greek stock market failed to stage any recovery, plunging -6.7% on the back of the election results, which is looking likely to result in a hung parliament.
The French stock market recovered from early selling after Socialist challenger Francois Hollande defeated President Nicolas Sarkozy on the weekend final election round, as bargain hunters stepped in. Across the region resource and construction sectors supported the market gains.
In London the FTSE 100 index last closed down -1.9% (or -111 points) at 5,655, the German DAX was closed up 0.1% (or 8 points) at 6,569 while in France the CAC was closed up 1.7% (or 52 points) at 3,214, Spain closed up 2.7% and Italy closed up 2.5%.
In China the SSE Composite closed flat at 2,450, while in Hong Kong the Hang Seng Index closed down -2.6% (or -549 points) at 20,536 and in Japan the Nikkei 225 Index was down -2.7% (or -261 points) at 9,119, South Korean KOSPI was down -1.6% for the session, while the Indian market closed up 0.5%.
The Dollar Index was higher at 79.1 on a lower Euro, while the Australian Dollar last traded higher at 1.0208. Commodities prices traded lower.For the session the Benchmark crude NYMEX for June delivery was down -0.6% settled at $US97.94. Copper prices are backing off key resistance level as Copper for June delivery was up 1.4% (or 5.3 cents) at $US3.7735, while June gold was down -0.4% (or -$US6.10) at $US1,639.
ALS – Alesco has urged its shareholders to take no action on a $188 million takeover offer from DuluxGroup as it needs further details on the offer.
IVA – Rio Tinto has named its nominees to the board of minerals explorer Ivanhoe Australia after taking effective control of the company’s major shareholder.
LEI – Leighton says the completion date for Brisbane’s Airport Link toll road has been pushed back by almost two months.
ORI – Orica says the chemical leaks at its ammonia plant near Newcastle in NSW have contributed to a four percent drop in the 1H12 net profit.
SUN – Suncorp Queensland’s biggest insurer has stopped writing new policies in two towns that repeatedly flood, urging governments to do more mitigation works.
WHC – Whitehaven Coal is continuing its expansion, launching a $172 million offer for NSW coal explorer Coalworks.
ASX – to open higher
US & UK/Europe – recover
Commodities Stock Index down -0.1%
Gold Stocks Index down -0.6%
Oil Stocks Index down -1%
US ADRs – Broadly Lower!!…
BHP down -0.5%, RIO up 0.3%; AWC down -3.6%
ANZ up 0.6% & NAB up 0.6%
NEM down -0.1%, JHX down -0.1%, NWS up 0.9%
By Michael Hevern
Head of Research