* US stock markets sold-off early after another weak round of US economic data and a surprise Supreme Court health-care decision that passes the Obamacare Health bill.
* European stock markets retreated overnight as the EU Leader summit began.
* Asian stocks ended mixed yesterday, as early gains eroded ahead of the EU summit meeting.
* Commodities prices lower, Gold prices are trading down around $US1,555 while crude-oil closed around $US78.
The Australian market is expected to trade lower today, as traders take their lead from overseas, as caution persists around the European Leaders summit and at home traders clean out their portfolios for the last day of the financial year. Markets sold-down in Europe and in the US. The Australian dollar remains just above parity overnight.
The SPI Futures is trading around the key support level of 4000, ended down -0.2% (or -8 points) at 4,013. The key levels for our index today are 3950 to 4050.
See below for ASX listed companies in the news today.
U.S. Markets
US stock markets sold-off early after another weak round of US economic data and a surprise Supreme Court health-care decision that passes the Obamacare Health bill. Losses were pared into the close, due to speculation that European leaders were nearing an agreement on plans to address the contagion from the eorozone debt crisis.
All three major indexes finished lower. In the broader markets the Technology sector was the biggest decliner and traders reversed positions after the surprise decision on Obamacare, which is a bonus for hospital providers, but managed-care providers slumped as the law keeps in place requirements for insurers to cover people regardless of health history.
Broadly stocks sold off early after the Supreme Court said Congress was acting within its powers under the Constitution when it required most Americans to carry health insurance or pay a penalty.
There was some optimism late in the session that the European Union leaders at the EU summit in Brussels were making progress to discuss the possibility of integrating budgets and banking systems. Expectations for the EU summit are, as other gatherings have failed to produce any significant breakthroughs, however, the German Finance Minister Wolfgang Schaeuble has reportedly said to the WSJ that Germany could agree to shared liability on debt if eurozone countries agree to give up sovereignty over their budgets, marking a softening in Germany’s stance. on the issue.
After market Nike has sold-off heavily after disappointing earnings, citing slowing Chinese demand and RIMM said it will slash jobs.
Commodities were sold-down across the board, with crude-oil below $US80 again and gold down around $US1,555.
All ten company groups that make up the S&P index traded generally lower, except for consumer sectors, with Materials up 0.1%, Energy sector was up 0.7%, Financials sector down -0.1%, Industrials sector was down -0.1%, Health Care down -0.5%, Technology was down -0.8%, while Consumer Staples were down -0.6%.
The Dow Jones closed down -0.2% (or -25 points) at 12,602, the S&P 500 index down -0.2% (or -3 points) at 1,329, the Nasdaq ended down -0.9% (or -25 points) at 2,849 and the smaller cap Russell 2000 was down -0.1%.
European Markets
European stock markets retreated overnight as the EU Leader summit began. The Stoxx Europe 600 Index slid 0.5%.
Across the region the financials led the declines, after Spanish bond yields surged above 7% again and German unemployment rate rose more than forecast, climbing in June for the fourth month this year.
UK stocks fell for the fifth day in the past six, as bank shares plunged with the banking index down -5.5%, its biggest fall since September, after British lawmakers criticised Barclays Plc over its manipulation of inter-bank lending rates (LIBOR). The bank was fined $US451 million for attempting to manipulate the inter-bank lending rate, but it faces law suits that could make this fine pale into insignificance (along with HSBC and Lloyds). The LIBOR is used as the benchmak for interest rates across the globe. Barclays plunged -16%, the most since June 2009, Royal Bank of Scotland Group (RBS) plummeted -11%, HSBC Holdings slumped -3.8% and Standard Chartered fell 1.2%.
European leaders are using the EU summit to prepare a 10-year road map for the eurozone. Some of the issues include common banking supervision, deposit insurance and a “criteria-based and phased” move toward joint debt issuance and also the EU imposition of upper limits on annual budgets and debt levels for the 17 eurozone nations. The German Chancellor Angela Merkel has stated Germany’s opposition to the issuance of joint euro-area bonds as a way of lowering Spanish borrowing costs, saying sovereign governments must be held accountable.
Traders have limited expectations over the outcome of this EU summit, but the EU leaders have just reported that they will make EUR120 billion for an eurozone growth plan.
In London the FTSE 100 index closed down -0.6% (or -31 points) at 5,493, the German DAX was closed down -1.3% (or -79 points) at 6,150, while in France the CAC was closed down -0.4% (or -11 points) at 3,051, Spain closed up 0.8% and Italy closed up 0.7%. Greece down -0.2%.
Asian Markets
Asian stocks ended mixed yesterday, as early gains eroded ahead of the EU summit meeting.
Markets in China and Hong Kong fell -1%, as financial stocks weighed, but energy stocks did provide some support after crude-oil rose, this will likely reverse today.
Chinese stocks have given back all their gains for the year, due to concerns over a slowing economy. The Chinese market has plunged -7.4% in June, the second-worst performance for the Asian region, as lower-than-estimated industrial output and retail sales data has outweighed the Chinese central bank’s first interest-rate cut since 2008. The Chinese economy has grown at its slowest pace in almost three years in the first quarter. This poor performance of the Chinese market is weighing on the ASX, particularly the mining stocks.
In China the SSE Composite closed down -0.9% (or -21 points) at 2,195, while in Hong Kong the Hang Seng Index closed down -0.8% (or -152 points) at 19,025, and in Japan the Nikkei 225 Index was up 1.7% (or 144 points) at 8,874, South Korean KOSPI closed up 0.1% for the session, while the Indian market closed up 0.1%.
Commodities
The Dollar Index was higher at 82.74 on a lower Euro, while the Australian Dollar last traded lower at 1.0042. Commodities prices traded lower.
For the session the Benchmark crude NYMEX for August delivery was down -2.2% settled at $US78.41. Copper prices are looking for key support level as Copper for August delivery was down -0.4% (or -1.4 cents) at $US3.343, while August Gold was down -1.6% (or -$US25.40) at $US1,553.
ASX News Today
BLD – Boral shares are down again over -4.5% as Moody’s Investors Service has downgraded Boral’s investment rating to Baa3 after the building products maker cut earnings guidance for the second time in less than three months.
CTX – Caltex Australia the oil refiner, expects its 1H12 profit to rise by up to 81 percent due to higher refinery production. Caltex on said its net profit for the six months to 30 June, on a replacement cost basis, was expected to be between $185 million and $205 million (up from $113 million previously).
STO – Santos shares plunged over -5% after the owners of the Gladstone liquefied natural gas (GLNG) project said they will bring forward $US2.5 billion in spending (from 2015) to speed up its delivery of gas, taking the up-front cost of the project to $US18.5 billion.
LEI – Leighton says the Brisbane’s Airport Link toll road is set to open one month late, which will cost its builders almost $1 million per day.
MTS – Mecash the grocery wholesaler full year profit has dropped by 63 percent because of the cost of its major restructure.
NWS – The News Corp board has agreed in principle to separate its larger entertainment division from struggling publishing businesses. The media company’s board has approved the split of its entertainment and publishing divisions.
STO – Santos the owners of the Gladstone liquefied natural gas (GLNG) project will bring forward $US2.5 billion ($A2.49 billion) in spending to speed up its delivery of gas.
WEB – Webjet the online travel company, says it will set up a new hotel venture in Dubai.
Corporate News
Ex-dividend Date
None
Market Summary
ASX – to open lower
US & UK/Europe – lower
Commodities Stock Index up 0.5%
Gold Stocks Index down -2.0%
Oil Stocks Index up 0.7%
US ADRs – Broadly lower!!…
BHP down -0.2%, RIO up 0.1%; AWC down -0.9%
ANZ down -0.7% & NAB down -1.4%
NEM down -2.1%, JHX down -0.9%, NWS down -0.6%
By Michael Hevern
Head of Research
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Tags: Asian Markets, ASX, ASX News, Business News, Commodities, Crude Oil, European Markets, Ex Dividend, gold price, Nasdaq, Stock Market Analysis, stockmarket, trading, US Market wrap
