* US stock markets have snapped a 4-day winning streak, in which they had recorded the biggest weekly gain for the year last week.
* European stock markets eased overnight giving back early gains, despite news that Spain was seeking to shore up its financial system.
* Asian stock markets rose sharply yesterday due to news that Spain will seek a bailout for its banks.
* Commodities prices mixed, Gold prices are trading around $US1,597 while crude-oil closed up around $US82.
The Australian market is expected to see some profit-taking today, as traders book profits ahead of the Greek elections next week, but miners may see some support on the back of the Chinese interest rate cut.
Markets recorded thier best week of the year, last week in the European and the US markets, but gave back early gains overnight, as traders realised that the Spanish bank bailout will not fix the eurozone debt crisis. The Australian dollar retraced from parity overnight.
The SPI Futures is trading below the key pivot level of 4080, ended down -1.1% (or -45 points) at 4,062. The key levels for our index today are 4020 to 4120.
See below for ASX listed companies in the news today.
Economics News Today
* Apr Lending Finance
* May NAB Business Survey
* NSW New South Wales State Budget.
US stock markets have snapped a 4-day winning streak, in which they had recorded the biggest weekly gain for the year last week. Traders were not convinced that Spain’s agreement to seek bailout funds for its banks will restore confidence in the Spanish economy.
The Dow Jones Industrial Index fell -1% after opening higher. In the broader markets the S&P500 and the Nasdaq fell over -1.4% overnight, led by the financials and closely followed by the materials, technology and energy sectors as all 10 S&P sectors closed in the red.
In the corporate news, Apple has unveiled updated Mac laptops and other new products and software at its annual developers conference. Alpha Natural Resources fell -9.2% and hit an all-time low, as coal stocks continued to sell-off due to the industry’s competition with cheap natural gas. Traders remain nervous ahead of the Greek elections this on 17 June.
All ten company groups that make up the S&P index traded lower, with Materials down -1.9%, Energy sector was down -1.4%, Financials sector down -1.8%, Industrials sector was down -1.3%, Technology was down -1.4%, while Consumer Staples were down -1.5%.
The Dow Jones closed down -1.4% (or -142 points) at 12,411, the S&P 500 index down -1.3% (or -3 points) at 1,309, the Nasdaq ended down -1.7% (or -49 points) at 2,808 and the smaller cap Russell 2000 was up down -2.3%.
European stock markets eased overnight giving back early gains, despite news that Spain was seeking to shore up its financial system. The Stoxx Europe 600 index closed slightly lower.
Spain has requested up to 100 billion euros ($US125 billion) in loans from the European Union to assist its banks. Statements about the deal left several open questions, including the exact amount of aid the country will need and how the funds will be distributed. The aid will be provided by the European Financial Stability Facility (EFSF) and the European Stability Mechanism.
However Spanish and Italian bond yields surged overnight as investors queried the terms of the Spanish bank “aid” deal. In Italy stocks dragged on the rest of the eurozone, as the Italian banks came under heavy selling pressure. In Germany the market edged higher.
In London the FTSE finished lower but some banks and oil firms did record gains with BP up 1.4% and Lloyds Banking Group 1.7% higher while HSBC Holdings climbed 0.5%. Traders are likely to continue to “risk-off” this week ahead of the Greek election on 17 June.
In London the FTSE 100 index last closed down -0.1% (or -3 points) at 5,432, the German DAX was closed up 0.2% (or 10 points) at 6,141, while in France the CAC was closed down -0.3% (or -9 points) at 3,042, Spain closed down -0.5% and Italy closed down -2.8%. Greece up 0.8%
Asian stock markets rose sharply yesterday due to news that Spain will seek a bailout for its banks, but anxiety over the upcoming Greek elections on 17 June.
Across the region the gains were broad-based. In China the Shanghai Composite rose but underperformed across the region. The gains after weekend data showed exports and imports growing, but inflation cooling more rapidly than expected amid an economic slowdown.
In Hong Kong the Hang Seng Index has its its best single day percentage advance since mid-January, while in Japan the Nikkei Stock Index jumped extending its gains, after snapping a 9-week losing streak last week. The Australian market was closed.
In China the SSE Composite closed up 1.1% (or 24 points) at 2,305, while in Hong Kong the Hang Seng Index closed up 2.4% (or 451 points) at 18,954 and in Japan the Nikkei 225 Index was up 1.9% (or 165 points) at 8,625, South Korean KOSPI was 1.7% for the session, while the Indian market closed up 1.2%.
The Dollar Index was higher at 82.69 on a lower Euro, while the Australian Dollar last traded lower at 98.66. Commodities prices traded mixed.
For the session the Benchmark crude NYMEX for June delivery was up -1.4% settled at $US82.70. Copper prices are looking for key support level as Copper for July delivery was down up 0.7% (or 2.3 cents) at $US3.3075, while July Gold was up 0.3% (or $US5.40) at $US1,596.80.
ANZ – ANZ Bank has cut its variable interest rates after the Reserve Bank of Australia’s 25 basis point cut.
AUT – Aurora Oil and Gas’s attempted takeover of Eureka Energy may succeed even if the suitor no longer wants it to.
EGP – Echo Entertainment is in focus as billionaire James Packer has forced the rival casino owner to dump
its chairman, but backed away from his plan to get Jeff Kennett on the company’s board.
FMS – The takeover of Flinders Mines the iron ore miner, to the tune of $554 million by a Russian company may be deailed by legal action.
QAN – Qantas shares fell below the $1.00 mark after the airline’s shock profit warning, due to the deterioration in the performance of its international business. QAntas has $1.45.share in cash.
MCP – McPherson the homewares and haircare products distributor has downgraded its guidance for the full year to June 30 by more than 10% due to low consumer confidence.
OMH – OM Holdings says the freight train carrying 6,000 tonnes of manganese has derailed in the Northern Territory.
PGA – Photon Group, the marketing and communications company will change its name to the Spanish word for January, Enero, reflecting its business better than the quantum of light.
WBC – Westpac has cut 20 basis points off its standard variable home loan rates.
ING Private Equity (IPE)
ASX – to open lower
US & UK/Europe – lower
Commodities Stock Index down -1.9%
Gold Stocks Index down -1.5%
Oil Stocks Index down -1.4%
US ADRs – Broadly lower!!…
BHP down -1.2%, RIO down -2.1%; AWC down -2.4%
ANZ down -1.8% & NAB down -1.9%
NEM up -1.6%, JHX up 0.9%, NWS down -1.6%
By Michael Hevern