* US stock markets rose to 3-month highs, as concerns over the eurozone subside, at least in the short-term.
* European stock markets continued higher, finishing at 4-month highs overnight..
* Asian markets jumped yesterday, playing catch up with their overseas counterparts.
* Commodities prices higher, Gold prices are trading around $US1,616 while crude-oil closed up around $US92.
The SPI Futures is trading above the key support level of 4180, ended up 0.3% (or 12 points) at 4224. The key levels for our index today are 4180 to 4250. The RBA is expected to leave rates on hold today, while the reporting season pick up pace.
See below for ASX listed companies in the news today.
Economics News Today
* RBA decides on interest rates.
US stock markets rose to 3-month highs, as concerns over the eurozone subside, at least in the short-term.
The three benchmark indexes rose over 0.3%, with the tech-heavy Nasdaq leading the way up 0.7%. In the broader market the gains were led by the materials and technology sectors. Investor sentiment was boosted by the easing in borrowing costs for Spain and Italy 2-year debt, with interest rates approximately half the crisis levels of over 7%.
In corporate news Best Buy surged 13% after the founder Richard Schulze, offer to buy-out the company, while Knight Capital plunged 24% the struggling market maker responsible for the mini “flash-crash” said it sold $US400 million in convertible preferred stock to bolster its capital position. Commodities continue higher, with gold stocks higher on the back of higher gold prices.
All ten company groups that make up the S&P index traded higher, with Materials up 0.9%, Energy sector up 0.3%, Financials sector up 0.4%, Industrials sector was up 0.2%, Health Care up 0.1%, Technology was up 0.7%, while Consumer Staples were up 0.4%.
The Dow Jones closed up 0.2% (or 21 points) at 13,117, the S&P 500 index up 0.2% (or 3 points) at 1,394, the Nasdaq ended up 0.7% (or 22 points) at 2,989 and the smaller cap Russell 2000 was up 0.7%.
European stock markets continued higher, finishing at 4-month highs overnight. The Stoxx Europe 600 index rose 0.5%.
Investor sentiment was boosted by expectations that policy makers will take action to address the eurozone debt crisis by bringing down borrowing costs for Spain and Italy. The optimism over the proposed plans by the European Central Bank (ECB) President Mario Draghi to address the worsening eurozone sovereign-debt crisis. there were also rumours that suggested the debt-laden Spanish government may ask for aid from the European temporary bailout fund. This prompted yields on Spanish and Italian bonds to fall by almost half the crisis levels. Across the region the gains were led by the banking and automobile sectors.
The Banks were bought up after investors reassessed comments by European Central Bank President Mario Draghi regarding their action plan and comment from the Germany that they would support the plan. The German and French market led the gains among the benchmarks, but the Spanish market surged another 4.4% overnight.
In London the FTSE 100 index closed up 0.4% (or 21 points) at 5,809, the German DAX was closed up 0.8% (or 53 points) at 6,918, while in France the CAC closed up 0.8% (or 27 points) at 3,401 and Spain closed up 4.4%
Asian markets jumped yesterday, playing catch up with their overseas counterparts, after the US reported better-than-expected employment and ISM manufacturing figures.
Comments from the European Central Bank officials also helped as they promised that the central bank could intervene and buy the bonds of struggling eurozone PIIGS countries, raising hopes that a bond buying program is still a possibility. Across the region the gains were broad based, led by the materials and energy sectors.
In China the SSE Composite closed up 1.0% (or 22 points) at 2,155, while in Hong Kong the Hang Seng Index closed 1.7% (or 332 points) at 19,998, and in Japan the Nikkei 225 Index was up 2.0% (or 171 points) at 8,726, South Korean KOSPI closed up 2.1% for the session, while the Indian market closed up 1.3%.
The Dollar Index was higher at 82.28 on a lower Euro, while the Australian Dollar last traded higher at 1.0565. Commodities prices traded higher.
For the session the Benchmark crude NYMEX for August delivery was up 0.8% settled at $US92.20. Copper prices are looking for key support level as Copper for August delivery was up 0.6% at $US3.389, while August Gold was up 0.4% (or $US6.90) at $US1,616.20.
ASX News Today
APA – APA Group the pipeline operator has been granted permission to look over the books of the $1.34 billion takeover target Hastings Diversified Utilities Fund (HDF). APA is considering raising $350 million for the deal.
ARG – Argo Investments company says global equity markets are unlikely to show any meaningful recovery in the short term but, in the long term,the Australian market represents relatively good value.
BHP – South Australian Premier Jay Weatherill says he still cannot see any justification for granting BHP Billiton an extension to the agreement to expand the Olympic Dam copper and uranium mine.
FMG – Fortescue Metals has secured $US1.5 billion in new funding for the expansion of its flagship iron ore operations in the Pilbara region, WA.
GPT – GPT Group the property group, has bought two business park assets in western Sydney for a total of $53.6 million.
HVN – Harvey Norman says its full year profit before tax is likely to be down almost 40 percent on the previous 12 months.
IGR – Integra Mines the WA gold miner has agreed to a $426 million takeover by fellow gold miner Silver Lake Resources.
PPX – PaperlinX the paper supplier has bought a small NZ packaging company as it works to reverse its poor financial performance.
WPL – Woodside says that the traditional owners will meet former Greens leader Bob Brown in a bid to sway opposition to Woodside Petroleum’s proposed $30 billion Kimberley gas hub.
Incitec Pivot Investor Breifing.
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index up 0.7%
Gold Stocks Index up 2.1%
Oil Stocks Index up 0.3%
US ADRs – Broadly higher!!…
BHP up 0.3%, RIO up 1.9%; AWC up 0.7%
ANZ up 20.5% & NAB down -0.3%
NEM up 3.2%, JHX up 0.1%, NWS up 0.6%
By Michael Hevern
Head of Research
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