* US stock markets rallied for a sixth straight day, closing above 4-month highs.
* European stock markets rose again overnight, on the back of better-than-expect data out of Germany.
* Asian stocks generally drifted higher yesterday.
* Commodities prices higher, Gold prices are trading around $US1,620 while crude-oil closed up around $US96.
The Australian market looks set to open positively, as we had positive leads from the US and European as optimism remains that central banks may act to stimulate their respective economies. Reporting today: ANZ, Duet, QBE and Santos.
The SPI Futures is trading above the key support level of 4180, ended up 0.7% (or 24 points) at 4307. The key levels for our index today are 4280 to 4350.
See below for ASX listed companies in the news today.
US Markets
US stock markets continued to melt-up overnight, with the S&P500 finishing at 4-month highs and within sight iof 4-year highs near-term.
The S&P 500 index has broken out of its narrow trading range overnight (had been trading around 1400 for the past week), while trading ranges on the Dow Jones have also been the narrowest since last March. The three benchmark indexes all rose around 1%, but the technology sector led the way, after a better-than-expected report from bellwether company CISCO, the miners also staged a solid recovery with the materials sector up 1.6%, while the financials and energy sectors were up over o.7% for the session. However trading volumes remain low as investors sit on the sidelines awaiting action from the central banks.
The S&P 500 index is on track to post its sixth straight week of gains and is within sight of hitting muilti-year highs, while the Dow Jones index is approaching 5-year highs. Overnight reports showed US building permits jumped to their highest in four years, which sparked the Home Builders sector, which have been one of the best performers in this year’s rally.
All ten company groups that make up the S&P index traded mixed, with Materials up 1.6%, Energy sector 0.9%, Financials sector up 0.7%, Industrials sector was up 1.1%, Health Care up 0.4%, Technology was up 1.4%, while Consumer Staples were up 0.8%.
The Dow Jones closed up 0.6% (or 85 points) at 13,250, the S&P 500 index up 1.1% (or 9 points) at 1,415, the Nasdaq ended up 1.0% (or 31 points) at 3,062 and the smaller cap Russell 2000 was up 1.0%.
European Markets
European stock markets traded hier to close at their highest level since March. The Stoxx Europe 600 Index rose 0.3% and is now up 16% from its June lows.
European stock markets have rallied for the last 10 weeks as investors anticipate a coordinated action by central banks globally to address the eurozone crisis in the hope that policy makers can move to stimulate the global economy.
Traders cheered the news that Spain is about to get an emergency disbursement from a EUR100 billion-euro bailout package, as the German Chancellor Merkel said even though the European Central Bank is insistence on strict conditions placed on bank borrowing, in return for help to lower borrowing costs in debt laden countries, Germany is also committed to ending the debt crisis in the eurozone. Across the region the miners, energy and financials sectors rose, but telecoms dropped after some recent downgrades in the sector.
In London the FTSE 100 index closed up 0.1% (or 2 points) at 5,834, the German DAX was closed up 0.7% (or 49 points) at 6,996, while in France the CAC closed up 0.9% (or 31 points) at 3,480 and Spain closed up 1.9%.
Asian Markets
Asian stock markets have drifted lower in the past week, due to ongoing concerns over slowing global growth. However we are seeing some buying as the week comes to an end. The MSCI Asia Pacific Index is trading flat for the week and this index is down -6.7% below its February high. And according to Bloomberg, of the 428 of the 1,008 companies that make up this index, over half have missed expectations.
Of the three benchmark indexes the Japanese market outperformed jumping nearly 4% for the week, and in Hong Kong and in China the markets been have declined around -1.5%. These declines came despite the Chinese Premier Wen reiterating that the Chinese government is trying to support growth, and this is why investors or expecting further easing measures in the second half of this year. Recent comments from the Chinese central bank revealing that it is concerned about a rebound in inflation have weighed on sentiment. To date 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 China the SSE Composite closed down -0.3% (or -7 points) at 2,112, while in Hong Kong the Hang Seng Index closed down -0.5% (or -89 points) at 19,962, and in Japan the Nikkei 225 Index was up 1.9% (or 168 points) at 9,092, South Korean KOSPI closed up 0.1% for the session, while the Indian market closed down -0.4%.
Commodities
The Dollar Index was higher at 82.39 on a lower Euro, while the Australian Dollar last traded higher at 1.052. Commodities prices traded generally higher.
For the session the Benchmark crude NYMEX for August delivery was up 1.4% settled at $US95.60. Copper prices are looking for key support level as Copper for August delivery was u[ 1.0% at $US3.33825, while August Gold was up 0.8% (or $US12.60) at $US1,619.20.
ASX News Today
ABC – Adelaide Brighton the building materials provider is optimistic of increasing its full year earnings, despite the challenges facing the residential and commercial property markets.
AMP – AMP the wealth manager beat expectations with a seven per cent rise in underlying first half profit.
ASX- ASX Ltdthe equity market operator, has reported a four per cent drop in annual net profit, due to decreased investor activity arising from the European debt crisis.
AWC – Alumina Ltd has flagged an end to Chinese control over aluminium prices as it posts a $US14.6 million half year loss.
BHP – BHP Billiton has flagged potential job losses at some of its Australian operations as it reins in costs amid falling commodity prices.
BXB – Brambles the global pallet and container business has lifted annual profit by more than 20 percent and expanded its overseas markets in the face of weak global conditions.
DXS – Dexus Property Group has suffered a 67 percent slump in full year profit, but is predicting a pick-up in earnings in the FY13.
IIN – iiNet sales team will soon follow the trucks that have arrived in towns across Australia to roll out the $37 billion national broadband network .
IVA- Ivanhoe Australia plans to cut costs by almost $100 million and reduce spending by up to $74 million over the next two years as it tries to improve cash flow and look to joint ventures in volatile market conditions.
FXJ – Fairfax sayas the Ellerston Capital, a fund manager controlled by Australian billionaire James Packer’s family interests, has emerged as a substantial shareholder in online auction site Trade Me.
GFF – Goodman Fielder has played down reports that the world’s biggest palm oil processor has its eye on the breads and spreads maker.
IVC – Invocare Australia’s biggest funerals operator is on the hunt for acquisitions after lifting its interim profit by 40 per cent.
MCR – Mincor Resources has achieved a return to profitability despite a falling nickel price.
ORL – Oroton says the top American designer Ralph Lauren is ending its 23-year licence deal with Australian accessories group.
PTM – Platinum Asset Management the listed funds manager expects a pick up in world share markets that will assist it to improved profitability.
TSE – Transfield Brothers Luca and Guido Belgiorno-Nettis will retire as directors of construction and maintenance group Transfield Services, ending a longstanding link between the company and its founding family.
TTS – Tatts Group is suing the Victorian government for hundreds of millions of dollars in compensation following the expiry of its gaming operator’s licence.
WES – Wesfarmers the Canny shoppers are seeking value for money to combat falling house prices and shrinking superannuation funds, Wesfarmers boss Richard Goyder says as his conglomerate posts an 11 per cent lift in full-year profit.
Corporate News
Reporting today:
ANZ Bank
APN
Duet (DUE)
QBE
Santos (STO)
TWE.
Ex-dividend Date
Korvest Ltd
Market Summary
ASX – to open higher
US & UK/Europe – higher
Commodities Stock Index up 0.9%
Gold Stocks Index up 0.9%
Oil Stocks Index up 0.2%
US ADRs – Broadly higher!!…
BHP up 1.5%, RIO up 1.2%; AWC down -4.7%
ANZ up 2.1% & NAB up 0.9%
NEM up 2.1%, JHX up 3.6%, NWS 0.5%
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
