* US stock markets slumped for a third week, its longest losing streak since August, on concerns over global financial stability.
* European stocks posted the biggest weekly drop in 8-months, as Greece moved closer to a possible exit from the eurozone and concern escalated that Spanish banks will need to be bailed out.
* Asian stock markets plunged last week, with a regional indexes posting their worst week in almost eight months, as Europe’s debt crisis worsened.
* Commodities prices looking for support, with Gold prices traded around $US1,592 while crude-oil closed around $US92.
The Australian market is expected to ease again today, as traders expect further volatility this week. Australia’s S&P/ASX 200 Index retreated -5.6 percent last week, as has erased $120 billion in equity value this month. Markets sold-off heavily last week with many EU markets trading in bear market territory. Traders continued to sell on concerns over Greece, and global markets have erased over $US4 trillion from the value of equities worldwide this month, as traders fret over the eurozone financial system destabilisation.
The SPI Futures is trading below the key pivot level of 4080, ended down -0.2% (or -8 points) at 4,050. The key levels for our index today are 3950 to 4150.
See below for ASX listed companies in the news today.
US stock markets slumped for a third week, its longest losing streak since August, due to the concerns over global economic growth slowing and the Greece may leave the eurozone area, sparking od eurozone debt crisis.
For the week the Dow Jones Industrial Index is down -3.5%,while in the broader markets the S&P 500 fell -4.3%, recording its biggest fall since last November, and has plunged -7.7% for May and the Nasdaq Composite plunged -5.3%, its biggest weekly fall since September and extending its losses the March high to -11%.
All 10 industries in the S&P 500 fell. The financials and materials sectors plunged over -6.5 percent, as shareholders sued JP Morgan Chase over the company’s $2 billion trading loss and commodity prices continue their demise as the US Dollar Index has its longest rally ever (up 14 straight sessions). The S&P500 Materials index has fallen for 9-straight days, recording its longest losing streak since September 2000. Retailers has also suffered in this recent smack-down, JC Penney has slumped -23 percent, the most since October 2008 and Abercrombie & Fitch has fallen 23 percent its lowest level since September 2010.
Facebook’s debut raised $16 billion in the largest IPO on record for a technology company, the trading session was interrupted by the shear volumes of trades and the offering valued the company at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential, the stock finished at its listing price.
All ten company groups that make up the S&P index traded lower, with the Materials down -0.4% , Energy sector was down -0.6%, Financials sector down -1.4%, Industrials sector was down -0.5%, Technology was down -0.9%, while Consumer Staples were down -0.8%.
The Dow Jones closed down -0.6% (or -73 points) at 12,369, the S&P 500 index down -0.7% (or -10 points) at 1,295, the Nasdaq ended down -1.2% (or -34 points) at 2,778 and the smaller cap Russell 2000 was down -0.9%.
European stocks posted the biggest weekly drop in 8-months, as Greece moved closer to a possible exit from the eurozone and concern escalated that Spanish banks will need to be bailed out. The Stoxx Europe 600 Index fell -5.2 percent and the index has plunged -12% since this year’s high in mid-March.
The selling rout has been triggered by the news that Greek leaders failed to form a government after elections, debating over austerity measures and will go to the polls again on 17 June. Also fuelling the selling was Moody’s Investors Service downgrade of 16 Spanish banks, where they cited that the Spanish recession, reduced funding access for lenders and deterioration in loan quality that will spread beyond real estate to household and company loans. Spains borrowoing costs have soared in the past month.
G8 the meeting of leaders of the Group of eight nations including US, Canada, UK, Germany, France, Italy, Japan and Russia, have pushed for Greece to stay in the eurozone area and supported boosting growth, despite Germany saying that Europe cannot spend its way out of this debt crisis. However the meeting offered little in specific measures on how to stimulate growth, particularly in the eurozone.
Equities markets fell in all the 17 EU nations this week with the London’s FTSE 100 down -5.5%, the French CAC 40 down -3.9% and the Germans DAX slidding -4.7%, while the Greek market slumped -10 percent. The next moves by the eurozone leadership is a European policy makers informal meeting on 23 May, but nothing concrete is expected until the planned June eurozone leadership summit. Expect more volatility ahead.
In London the FTSE 100 index last closed down -1.3% (or -70 points) at 5,267, the German DAX was closed down -0.6% (or -38 points) at 6,271 while in France the CAC was closed down -0.1% (or -40 points) at 3,008, Spain closed up 0.4% and Italy closed down -0.3%.
Asian stock markets plunged last week, with a regional indexes posting their worst week in almost eight months, as Europe’s debt crisis worsened, US economic data fell short of estimates and Chinese data showed home prices and investment declined.
Almost $4 trillion has been wiped from global equity markets this month, as the Greek leaders failed to form a government reigniting the European debt crisis fears and signs of slowing economic growth in China and U.S. damped the outlook for global demand.
In Japan the Nikkei fell -3.8% wiping out all its gains for the year, and posting its biggest weekly decline since last September. In China the Shanghai Composite Index fell -2.1% last week after Chinese home prices fell from a year earlier in April as a record 46 of 70 cities tracked by the government as officials pledged to keep restrictions on property purchases that have decimated buyer demand. In Hong Kong the Hang Seng Index plunged -5.1% and in South Korea the Kospi Index lost -7% for the week.
In China the SSE Composite closed down -1.4% (or -34 points) at 2,344, while in Hong Kong the Hang Seng Index closed down -1.3% (or -250 points) at 18,951 and in Japan the Nikkei 225 Index was up 3.0% (or -265 points) at 8,611, South Korean KOSPI was up 0.3% for the session.
The Dollar Index was higher at 81.90 on a lower Euro, while the Australian Dollar last traded lower at 98.44 Commodities prices traded lower again.
For the session the Benchmark crude NYMEX for June delivery was down -1.1% settled at $US91.48. Copper prices are below key support level as Copper for June delivery was down -0.6% (or -0.2 cents) at $US3.464, while June Gold was up 1.1% (or $US17.00) at $US1,591.90.
ASX News Today
ANZ – ANZ chief executive Mike Smith says, credit markets are already closing as the euro zone debt crisis continues.
MYR – Myer says scarcity of customers and heavy discounting are expected to have kept Myer’s sales subdued
PNA – PanAust the Laos-focused miner expects production to rise in the coming years after an upgrade of its flagship copper mine.
PDN – Paladin Energy the uranium miner says its mine in Malawi is back at full production following an industrial dispute sparked by demands for a 66 percent pay rise from local workers.
SHL – Sonic Healthcare will buy Healthscope’s pathology businesses in three Australian states and Candberra for $100 million.
TEN – Ten Network Holdings is negotiating the sale its outdoor advertising business Eye Corp, and has entered into an exclusivity bidder agreement.
TOL – Toll Holdings, Australia’s largest trucking company, plunged 23 percent last week, after forecasting full-year profit as much as 11 percent below forecasts.
Elders Ltd (ELD) Interim 2012 Earnings conference
James Hardie (JHX) Q4 2012 Analyst meeting
DuluxGroup Ltd (DLX)
BHP down -1.7%, RIO down -2.5%; AWC down -2.2%
ANZ down -3.1% & NAB down -3.1%
NEM up 0.7%, JHX down -1.6%, NWS down -1.1%
By Michael Hevern