At Multi-Month Lows On Concerns over EU Geopolitics, China & US Financials
* US stock markets were unable to hold on to early gains ending at 3-month lows on concerns over global financial stability, after Greece says it will have to go back to the polls.
* European stock markets ended lower again overnight, as traders continued to sell as the prospect of a disorderly Greek default loomed.
* Asian markets traded weaker yesterday and there is further weakness to follow after the EU and US markets sold-off overnight.
* Commodities prices were lower, with Gold prices traded around $US1,544 while crude-oil closed around $US94.
The Australian market is expected to sell-off again today. Markets traded higher on the open but finished lower in the European markets and in the US. Traders have hit the sell button on concerns over the prospect of a disorderly Greek default .
The SPI Futures is trading below the key pivot level of 4300, ended down -0.8% (or -33 points) at 4,242. The key levels for our index today are 4180 to 4280.
See below for ASX listed companies in the news today.
US stock markets were unable to hold on to early gains ending at 3-month lows on concerns over global financial stability, after Greece says it will have to go back to the polls.
Trader sentiment was battered after comments from the Greek political leaders sparked accelerating concern about the country’s potential exit from the eurozone, the health of the its banks (as depositors withdrew EUR700 million from local banks on Monday) and the prospect of a disorderly default. The Greek President Karolos Papoulias said the country will hold new elections, but this will take at least a month to resolve.
The Dow industrials index fell for the ninth session of the past 10 session and had its lowest close since mid-January. In the broader markets the s&p500 and the Nasdaq fell over -0.3%, as sellers stepped in on the news from Greece.
In economic news US April retail sales and consumer prices were little changed and were in-line with estimates, while manufacturing activity in the New York region rebounded more sharply than economists had forecast, while U.S. home builders’ sentiment rose to a 5-year high.
Commodity prices continued lower with crude-oil futures trading below $US94 for the first time in five months as European political turmoil dimmed prospects for economic growth. Gold futures slumped for a third session, again suffering from the flight to safety in the US dollar.
All ten company groups that make up the S&P index traded lower, with the Materials down -1.5% , Energy sector was down -1.7%, Financials sector down -0.5%, Industrials sector was down -0.5%, Technology was down -0.3%, while Consumer Staples were down -0.1%.
The Dow Jones closed down -0.5% (or -63 points) at 12,632, the S&P 500 index down -0.6% (or -8 points) at 1,330, the Nasdaq ended down -0.3% (or -31 points) at 2,893 and the smaller cap Russell 2000 was down -0.2%.
European stock markets ended lower again overnight, as traders continued to sell as the prospect of a disorderly Greek default loomed. The European Stoxx 600 index dropped -0.7%, closing at its lowest level for the year.
The Greek market slumped another -3.6%, as the Greek Leadership said the country was heading for new elections after talks between parties to form a coalition government failed.
In other economic data the German economy grew in the first quarter, on a seasonally adjusted basis, German gross domestic product advanced a stronger-than-expected 0.5% in the first quarter (up from a dip of -0.2%), expanding more than expected. The statistical office of the European Union reported a preliminary reading showed the eurozone gross domestic product was flat, but this was ahead of economists forecasts for a slight contraction.
The concern over Greece dominated trader sentiment across the region as all sectors finished in the red, led by the eurozone banking sector.
In London the FTSE 100 index last closed down -0.5% (or -28 points) at 5,437, the German DAX was closed down -0.8% (or -51 points) at 6,401 while in France the CAC was closed down -0.6% (or -81 points) at 3,039, Spain closed down -1.6% and Italy closed down -2.6%.
Asian markets traded weaker yesterday and there is further weakness to follow after the EU and US markets sold-off overnight.
Across the region selling was broad based as traders fretted over the prospect that Greece may have to exit from the eurozone and its potential implications on the eurozone financial system stability, from a disorderly Greek default.
Chinese shares ended at a 1-month low following on from the global weakness. Mining stocks led the declines on the back of the weakness in commodity prices on concerns over global growth. In Japan the Nikkei Index fell to 3-month lows, as investors tried to factor in the renewed concerns over the eurozone debt crisis and the weakness of the euro dollar currency sent euro-linked exporters lower.
Bucking the trend in Hong Kong the Hang Seng Index finished 0.8% higher, snapping an 8-day losing streak, ending its longest decline since May 2011. We expect further weakness in the region today.
In China the SSE Composite closed down -0.3% (or -6 points) at 2,375, while in Hong Kong the Hang Seng Index closed up 0.8% (or 159 points) at 19,735 and in Japan the Nikkei 225 Index was down -0.6% (or -73 points) at 8,900, South Korean KOSPI was down -0.8% for the session, while the Indian market closed up 0.6%.
The Dollar Index was higher at 80.90 on a lower Euro, while the Australian Dollar last traded lower at 99.42. Commodities prices traded lower again.
CCL – Coca-Cola Amatil the beverages supplier, expects a higher underlying profit in the first half of the 2012 calendar year, despite tough trading conditions.
GNS – Gunns the woodchipper has signed a deal to sell its hardwood sawn timber business for $28 million as it continues to finalise its long-awaited capital raising.
HDF – Pipeline Partners Australia, has trumped another bid by pipeline owner APA Group (APA) which has already accumulated 21% of the fund. They have bid $1.25 billion ($2.35/share) for energy infrastructure investment firm Hastings Diversified Utilities Fund.
PBG – Pacific Brands the clothing and footwear manufacturer, has plunged after the company said there was no prospect of a takeover any time soon.
SUN – Suncorp continues to be hit by natural disasters, with its insurance costs for the financial year currently $253 million above its expectations, core bank lending was up 3% QoQ to $42 billion and they said that General Insurance displayed improved underlying trends.
WBC – Westpac has cut its interest rates on its short term fixed rate home loans by up to 20 basis points.
Buderim Ginger (BUG)
BHP down -2.5%, RIO down -4.2%; AWC up 1.9%
ANZ down -1.1% & NAB down -0.9%
NEM down -2.9%, JHX down, NWS down -1.1%
By Michael Hevern