* US stock markets rallied for a sixth straight day.
* European stock markets ended modestly lower overnight, on thin trading volumes..
* Asian stock markets have closed lower for three of the past four days.
* Commodities prices higher, Gold prices are trading around $US1,607 while crude-oil closed up around $US94.
In Australia the S&P ASX 200 Index fell -0.3% yesterday, after a survey showed consumer confidence fell the most in five months due to the highest interest rates among major developed nations. The Australian market looks set to open negatively, as we had subdued leads from the US and European as optimism remains that central banks may act to stimulate their respective economies strt to wane. Reporting today: see below. Rememeber its is index option expiry today.
The SPI Futures is trading above the key support level of 4180, ended up 0.1% (or 5 points) at 4251. The key levels for our index today are 4230 to 4280.
See below for ASX listed companies in the news today.
US stock markets rallied for a sixth straight day, as trading volumes remain low and the VIX volatility index is at 5-year lows.
The three bench mark indexes finished flat. The S&P 500 index has been hovering around 1,400 for the past six trading sessions, but trading volumes a at their lowest level since at least 2008 excluding holidays and the VIX a measure of volatility sliding to a five-year low. Markets are experiencing the summer doldrums and look for a catalyst to jump (in either direction).
In economic news the Fed reported that US industrial production increased in July, due to a pickup in motor vehicle output and a rebound in utility use during the hottest month on record. Conversely in a separate report showed manufacturing in the New York area unexpectedly contracted in August for the first time since October.
It is these mixed signals that have investors on edge in the near term and we can expect a jump in volatility if traders are disappointed in regards to the monetary easing measures (or timetable). At this stage the Fed is not expected to move until at least mid-September and until the Eu leaders have made their move.
The Dow Jones closed down -0.1% (or -7 points) at 33,165, the S&P 500 index up 0.1% (or 2 points) at 1,405, the Nasdaq ended up 0.5% (or 14 points) at 3,030 and the smaller cap Russell 2000 was up 0.9%.
European stock markets ended modestly lower overnight, on thin trading volumes. The Stoxx Europe 600 lost -0.1%, backing off its highest level in nearly five months, but according to Bloomberg the volume of shares changing hands in companies listed on the Stoxx Europe 600 was 53 percent lower than the average of the past month.
Across the region the miners dragged on sentiment, with stocks like RIO Tinto and BHP down -3.4% and -2.3% respectively. Investor sentiment has been weighed down by reports that the eurozone economy contracted in the second quarter as a worsening debt crisis and government spending cuts have triggered recession in six of the eurozone countries. Gross domestic product (GDP) for the eurozone fell -0.2 percent from the first quarter.
The market rally in European stocks over the past ten weeks has been due to better-than-expected company earnings and speculation ECB policy makers will do more to stimulate the economy. However traders are struggling to find another catalyst to push the markets higher, until these easing measures are announced.
In Germany the DAX slipped -0.4% despite a report that showed German growth slowed less than forecast. In London UK jobless claims unexpectedly fell in July as the Olympic Games created jobs in the period. The Spanish market rose as the Spanish government said it is considering a request for a sovereign bailout, according to European Economic and Monetary Affairs Commissioner Olli Rehn. A number of markets were closed including Italy, Luxembourg, Austria and Greece.
In London the FTSE 100 index closed down -0.5% (or -32 points) at 5,833, the German DAX was closed down -1.1% (or -28 points) at 6,947, while in France the CAC closed down -0.1% (or -1 points) at 3,449 and Spain closed up 0.9%.
Asian stock markets have closed lower for three of the past four days, due to ongoing concerns over slowing global growth. The MSCI Asia Pacific Index fell -0.5%, as two stocks fell for every one that gained, this index is -6.7% below the February high.
The Japanese market ended flat, but in China the market is down at 2-week lows, again approaching its 4-years lows, as traders are concerned over the nation’s economic slowdown as it is curbing demand for products from copper to household appliances. The mining sector was the worst hit.
Comments from the Chinese central bank reveal that it is concerned about a rebound in inflation. The Chinese central bank has left the reserve ratio for the biggest banks at 20 percent since mid-May and has lowered interest rates in June and July. Investors are showing concern that the central bank may hold off on further easing measures in the near-term.
In Australia the S&P ASX 200 Index fell -0.3%, after a survey showed consumer confidence fell the most in five months due to the highest interest rates among major developed nations.
In China the SSE Composite closed down -1.1% (or -23 points) at 2,118, while in Hong Kong the Hang Seng Index closed down -1.2% (or -239 points) at 20,052, and in Japan the Nikkei 225 Index was down -0.1% (or -5 points) at 8,925, South Korean KOSPI closed up 1.3% for the session, while the Indian market closed up 0.5%.
The Dollar Index was higher at 82.69 on a lower Euro, while the Australian Dollar last traded higher at 1.050. Commodities prices traded generally higher.
For the session the Benchmark crude NYMEX for August delivery was up 0.9% settled at $US94.33. Copper prices are looking for key support level as Copper for August delivery was down -0.2% at $US3.3495, while August Gold was up 0.3% (or $US4.20) at $US1,606.60.
ASX News Today
ALS – DuluxGroup says its takeover talks with Alesco have stalled but its $210 million offer remains on the table.
CBA – CommBank has posted a $7.09 billion full year profit, the largest ever made by an Australian bank, and increased its dividend to $1.97.
CMG – Chandler Macleod the recruitment firm says diversification has helped it increase its full year profit by 45 percent despite a lack of business confidence continuing to plague the broader economy.
CSS – Clean Seas Tuna will cut jobs and put its Kingfish business up for sale because problems associated with sick fish have continued to hurt its bottom line.
EGP – Echo Entertainment Group the casinos operator says interest in the company from rivals Crown and Malaysian gambling group Genting shows the value of its gambling licences in NSW and Queensland.
HDF – Pipeline Partners Australia (PPA) Pty Ltd has increased its cash offer for Hastings Diversified Utilities Fund (HDF) by 10 cents to $2.43 per share.
ORL – Oroton Group has placed its shares in a trading halt ahead of an expected announcement about its licence with US designer Ralph Lauren.
OZL – Oz Minerals has lifted its first half profit to $119.5 million but warned its full year production could come in at the lower end of its forecast, and cut its dividend.
PRY – Primary Health Care the medical centres operator and pathology provider has unveiled a near 50 percent rise in full year profit and forecast stronger earnings in 2012/12.
WDC – Westfield Group the shopping centre giant, says half year profit is up more than 30 percent despite a 10 percent fall in revenue due to tough trading conditions..
Adelaide Brighton (ABC)
Matric Engineering (MCE)
Platinum Asset Management (PTM).
ASX – to open lower
US & UK/Europe – closed flat to lower
Commodities Stock Index up 0.1%
Gold Stocks Index down -0.1%
Oil Stocks Index down -0.1%
US ADRs – Broadly mixed!!…
BHP down -1.1%, RIO down -1.8%; AWC down -2.1%
ANZ down -0.7% & NAB down -1.5%
NEM up 0.6%, JHX up 0.6%, NWS up 0.3%
By Michael Hevern
Head of Research
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