* US stock markets advanced overnight, on the back of beatter-than-expected housing data.
* European stock markets eased overnight, as traders remain cautious.
* Asian stock markets rose as emerging market stocks rose snapping a 3-day sell-off, as energy companies rallied.
* Commodities prices generally lower, Gold prices are trading down around $US1,574 while crude-oil closed around $US79.
The Australian market is expected to hold today, as traders take their lead from overseas, as caution persists ahead of the European Leaders summit and at home traders clean out their portfolios for the new financial year. Markets eased in Europe and drifted higher in the US. The Australian dollar remains just above parity overnight.
The SPI Futures is trading around the key support level of 4000, ended up 0.2% (or 8 points) at 3,991. The key levels for our index today are 3950 to 4080.
See below for ASX listed companies in the news today.
US stock markets advanced overnight, on the back of beatter-than-expected housing data.
The three major indexes drifted higher up around 0.4%, as traders set aside the concerns over the eurozone. In the broader market the consumer discretionary and energy sectors led the gains, as all 10 sectors edge into the green. Home builders rose as the S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010 (versus an expected -2.5 percent drop).
In economic news the data suggests the US economy remains challenged, as confidence among U.S. consumers declined in June to a five-month low. Elsewhere the Conference Board’s preliminary consumer confidence index reported confidence fell to a five-month low, falling for a fourth consecutive month in June. Also according to the Federal Reserve Bank of Richmond’s manufacturing general-business index, economic activity among manufacturers in the central-Atlantic region contracted in June after months of slowing expansion. There are also concerns that American corporate earnings are on track to record their first quarterly drop since 2009, as a Bloomberg survey of analysts predicts S&P 500 companies will report a -1.1% decline in 2Q earnings.
In corporate news Newscorp jumped over 8%, as the company confirmed its is considering splitting up the film and entertainment business from its newspaper and publishing business.
All ten company groups that make up the S&P index traded higher, with Materials up 0.3%, Energy sector was up 1.1%, Financials sector up 0.9%, Industrials sector was up 0.2%, Health Care up 0.3%, Technology was up 0.4%, while Consumer Staples were up 1.2%.
The Dow Jones closed up 0.3% (or 32 points) at 12,534, the S&P 500 index up 0.5% (or 6 points) at 1,320, the Nasdaq ended up 0.6% (or 18 points) at 2,854 and the smaller cap Russell 2000 was up 0.4%.
European stock markets eased overnight, as traders remain cautious. The Stoxx Europe 600 index edged -0.1% lower after a choppy session, extending losses for a fourth straight session.
Investors mood was kept in check as Spanish and Italian bonds fell and the euro dollar weakened as borrowing costs increased at debt sales. Yields on 10-year Spanish government bonds rose 24 basis points to 6.83% in the secondary market. Spain is bracing for a downgrade to junk by the Moody’s Investors Service.
Selling prevailed in the previous session ahead of the European Union summit and concerns that EU leaders will fail to address the sovereign debt crisis. Traders remain cautious ahead of the European Union summit, as these are calls for increased fiscal integration and a move toward a European banking union. However remarks from German Chancellor Angela Merkel remains opposed to the views that Europe should have shared total debt liability.
In London the FTSE 100 index closed down -0.1% (or 4 points) at 5,447, the German DAX was closed up 0.1% (or 4 points) at 6,137, while in France the CAC was closed down -0.3% (or -9 points) at 3,012, Spain closed down -1.4% and Italy closed down -1.1%. Greece up 1.6%.
Asian stock markets rose as emerging market stocks rose snapping a 3-day sell-off, as energy companies rallied on higher oil prices.
Across the region trader sentiment was down on the back the Moody’s Investors Service downgrading 28 Spanish banks, citing the that Spanish sovereign debt and rising losses on real estate loans.
Stocks have been under sustained pressure with the the MSCI Emerging Markets Index has slumping -12% this quarter on concern over the worsening eurozone debt crisis. According to Bloomberg this index is now trading at 9.9 times estimated earnings, compared with an 11.8 multiple for the MSCI World Index of developed nations. Traders do not have much of a lead from overseas market overnight.
In China the SSE Composite closed down -0.1% (or -2 points) at 2,222, while in Hong Kong the Hang Seng Index closed up 0.5% (or 84 points) at 18,981 and in Japan the Nikkei 225 Index was down -0.8% (or -70 points) at 8,664, South Korean KOSPI closed down -0.4% for the session, while the Indian market closed up 0.1%.
The Dollar Index was higher at 82.39 on a lower Euro, while the Australian Dollar last traded flat at 1.0064. Commodities prices traded lower.
For the session the Benchmark crude NYMEX for June delivery was up 0.2% settled at $US79.36. Copper prices are looking for key support level as Copper for July delivery was down -0.1% (or -0.5 cents) at $US3.3205, while July Gold was down -0.9% (or -$US13.50) at $US1,574.90.
FXJ – Fairfax board under review as the mining magnate Gina Rinehart says her company Hancock Prospecting may sell its interest in Fairfax Media if “suitable conditions” are not offered to it.
IVA – Ivanhoe Australia the Queensland-focused minerals explorer will cut 50 jobs as its new owner Rio Tinto seeks to cut costs in the company.
LLC – Lend Lease’s Australian businesses Abigroup has been awarded a $315 contract to design and construct an upgrade to Sydney’s M5 motorway.
NWS – News Ltd has confirned it is considering splitting its buisiness groups and has declared about 100 redundancies as it starts to shed staff in a major restructure.
PPX – PaperlinX expects to report a loss of $171 million for the 2012 financial year following difficult trading conditions in the second half, restructuring charges and losses on the sale of its operations in the United States and Italy.
TEN – Ten says Gina Rinehart and Lachlan Murdoch have increased their number of shares in the Ten Network through the media company’s recent fund raising venture.
Aneka Tambang (ATM)
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index up 0.1%
Gold Stocks Index down -1.5%
Oil Stocks Index up 1.1%
US ADRs – Broadly higher!!…
BHP up 0.6%, RIO up 1.5%; AWC down -0.3%
ANZ up 1.6% & NAB up 1.4%
NEM down -1.8%, JHX up 2.6%, NWS up 8.3%
By Michael Hevern
Head of Research
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