* US stock markets posted their biggest percentage gains of the year overnight.
* European stocks rose sharply overnight.
* Asian stock markets climbed yesterday, as traders bought up on hopes that the recent market collapse will prompt central banks to implement further easing.
* Commodities prices rose, Gold prices are trading around $US1,622 while crude-oil closed up around $US85.
The Australian market is expected to jump today, as traders went shopping overnight. Locally the GDP figures surprised to the upside. Markets jumped higher in the European and the US markets, as traders looked for bargains and turned “Risk-On”. The Australian dollar surge having recently bounced off 8-month lows.
The SPI Futures is trading above the key pivot level of 4080, ended up 1.5% (or 59 points) at 4,121. The key levels for our index today are 4080 to 4180.
See below for ASX listed companies in the news today.
Economics News Today
* ABS Employment Report.
US stock markets posted their biggest percentage gains of the year overnight as investors were encouraged by central bankers in Europe and the US that may be signalling that more monetary stimulus may be forthcoming.
Traders closed their short positions ahead of the FOMC Fed meeting tonight. The Dow Jones Industrial Index jumped higher breaking a 4-day losing streak, while in the broader markets the S&P500 and the tech-heavy Nasdaq jumped over 2.3%, led by the FInancials and the Materials sectors. The S&P500 managed to closed above the all important 200 day moving average. All of the Dow components and all 10 sectors of the S&P 500 traded higher for the session.
The Fed meets tonight and some policy makers inside the Fed have indicated that they are considering more stimulus, in order to boost the economy if the US growth outlook worsens.
Traders are taking on more risks due to rising expectations that the top central banks are poised to take action on the easing front. Commodity prices rose overnight, with copper recording its biggest single session rise for the year.
All ten company groups that make up the S&P index traded higher, with Materials up 2.5%, Energy sector was up 3.1%, Financials sector up 2.9%, Industrials sector was up 2.7%, Technology was up2.3%, while Consumer Staples were up 2.2%.
The Dow Jones closed up 2.4% (or 286 points) at 12,414, the S&P 500 index up 2.3% (or 30 points) at 1,315, the Nasdaq ended up 2.4% (or 66 points) at 2,844 and the smaller cap Russell 2000 was up 2.6%.
European stocks rose sharply overnight, as the European Central Bank (ECB) decided to leave policy unchanged and officials are motivated to rescue the troubled Spanish banks. The Stoxx Europe 600 index closed up 2.3%.
Markets across the region jumped over 2%, as traders stepped in looking for bargains, particularly in the financials and mining sectors. The Stoxx Europe 600 index for the banking sector surged 3.9% higher.
Investors were optimistic that the European Stability Mechanism could inject capital directly into eurozone banks, which would have the advantage of on not loading the country debt levels. The ECB left interest rates at 1%, but said growth remains weak and the economic outlook in the eurozone is subject to increased downside risks, leaving the door open for a rate cut in July. Even the Spanish banks rose after reports from Germany that the European Financial Stability Facility (EFSF) may be permitted to lend money to the Spanish bank rescue fund, in order to recapitalise the country’s troubled banks.
In London traders returned from a 2-day break in a jubilant mood pushing the FTSE 100 2.4% higher, led by the financials with Barclays up 8.2%, RBS up 6.7% and Lloyds Bank up 5.2%.
German investors pushed the DAX higher for the first time in 5-sessions, despite Moody’s Investors Service lowering its investment-grade ratings on six German banks by one notch because of increased risk of further shocks from the eurozone debt crisis contagion. Moody’s is in the process of reviewing of over 100 European banks, so stay tuned for more ratings adjustments.
In London the FTSE 100 index last closed up 2.4% (or 124 points) at 5,384, the German DAX was closed up 1.2% (or 125 points) at 6,094, while in France the CAC was closed up 2.4% (or 72 points) at 3,058, Spain closed up 2.4% and Italy closed up 3.5%.
In Japan the Nikkei bounced on the back of a weakening yen, as trading volumes spiked indicating short covering of positions ahead of the European Central Bank meeting.
In Hong Kong the Hang Seng Index jumped 1.4%, but in China the Shanghai Composite finished flat, despite hopes that the Chinese central bank will start to implement easing policies sooner rather than later. However property developer stocks fell after reports that the housing ministry is saying Chinese authorities will continue to implement measures to curb the property market “without wavering.”
In China the SSE Composite closed down -0.1% (or -2 points) at 2,310, while in Hong Kong the Hang Seng Index closed up 1.4% (or 261 points) at 18,520 and in Japan the Nikkei 225 Index was up 1.8% (or 151 points) at 8,533, South Korean KOSPI was down -2.0%% for the session, while the Indian market closed up 2.7%.
The Dollar Index was higher at 82.20 on a lower Euro, while the Australian Dollar last traded higher at 99.32. Commodities prices traded higher.
For the session the Benchmark crude NYMEX for June delivery was up 1.5% settled at $US85.52. Copper prices are looking for key support level as Copper for July delivery was up 2.6% (or 8.6 cents) at $US3.3375, while July Gold was up 0.2% (or $US3.50) at $US1,620.40.
AGK – AGL Energy has raised $356 million through the institutional stage of its $900 capital raising to help pay for the Loy Yang brown coal power station.
BANKs – the major banks will take some time to decide whether they will pass on the full Reserve Bank of Australia’s (RBA) 25 basis point cut to the cash rate.
DLX – Takeover target Alesco Corporation expects to report an annual underlying profit above the figure it had previously anticipated, after a strong finish to its fiscal year.
DTE – Dart Energy the coal seam gas miner, has received approval to drill wells north of Newcastle.
QAN – Qantas Airways has hit an air pocket and is trading at all-times low after the airline said it was expected to post a net loss for the FY12 year.
QRN – QR National says it plans to cut 500 jobs in regional Queensland and that may not be the last round of redundancies, unions warn.
TEN – Ten Network is raising $200 million to strengthen its balance sheet through the offer of new shares to existing shareholders.
TLS – Telstra, Australia’s biggest phone company, says it is in talks with Vodafone over the possible sale of its TelstraClear unit in NZ.
VAH – Etihad Airways has bought a 4 percent stake in Virgin Australia.
WHC – Whitehaven Coal says it is better placed now to develop the highly regarded Maules Creek coal project in NSW after it sold a stake in the development.
ASX – to open sharply higher�
US & UK/Europe – sharply higher
BHP up 3.3%, RIO up 4.5%; AWC up 3.4%