* U.S. markets jumped broadly higher overnight, as data showed higher February retail sales and signs of job growth. Non-farm monthly jobs report is due out tonight.
* European markets rose overnight, as the ECB reconfirmed its support of stimulus spending.
* Asian markets are again set to trade higher today, as worries over the escalating Middle-East political turmoil eased and crude oil and gold prices stabilised.
* Commodities were generally higher as the US dollar fell.
* The price of crude oil eased, buoying world markets.
The SPI Futures is trading at the key pivot level of 4850, and closed up 1.0% (or 49 pts) at 4,851. The key levels for our index today are 4880 and 4800. M&A activity continues to drive specific stocks.
The ASX is set to trade higher today, following solid leads from overseas markets. Expect Financials and Mining stocks to support the market.
See below for ASX stocks in the news today.
U.S. Markets
U.S. markets jumped broadly higher overnight, with their best 1-day performance in 3 months. Data showed higher February same-store sales reports from retailers and signs of job growth with an unexpected fall in new applications for unemployment benefits. Crude oil prices eased slightly, but remained above $US101 a barrel after US President Obama said Libyan leader Muammar Gadaffi must step down, saying a no-fly zone over Libya was under consideration. Investors are factoring in an improving Non-farm monthly jobs report due out tonight; the unemployment rate is currently at 9 percent.
In economic news:
* The Department of Labor reported first-time claims for unemployment benefits fell to 368,000, the lowest level for claims since May 2008.
* The Institute for Supply Management (ISM) reported that its measure of hiring by service companies rose to the highest level since April 2006 (the index covers industries including retail, health care and financial services). This report follows Wednesday’s payroll processor ADP data showing that private employers are added more jobs than expected last month
* Retailers Macy’s Inc, Retailers Limited Brands Inc and Nordstrom Inc all reported February same-store sales gains over the previous corresponding period last year.
The Dow closed up 0.1% (or 8 points) at 12,067, while in the broader market the S&P 500 index was up 0.2% (or 2 points) at 1,308 and the tech-heavy Nasdaq ended up 0.4% (or 11 points) at 2,748. The S&P 500 held below key support at 1324, 1275 is the next target.
All ten company groups that make up the S&P index rose, with outperformers including Industrials up 2.4%, and Materials, Financials and Healthcare all up over 2%, while the Energy sector rose 1.7%.
European Markets
European markets rose overnight, as the ECB reconfirmed its support of stimulus spending and crude oil prices eased. European Central Bank (ECB) President Jean-Claude Trichet signaled that an increase in official interest rates at its meeting next month “is possible,” and reaffirmed that the bank will continue to lend as much as euro-zone banks want for at least another three months.
In London the FTSE 100 ended above the 6,000 level for the first time since February 21st, having fallen in eight of the previous nine trading days. Base metals closed higher on the London Metal Exchange (LME) overnight, supported by a weaker US dollar, stronger equities markets and easing oil prices. There was active trading in BSkyB, after the British government cleared the way for News Corp to win control of the company.
The FTSE 100 index closed up 1.5% (or 90 points) at 6,005, the German DAX was up 0.6% (or 45 points) at 7,225, while in France the CAC was up 0.7% (or 26 points) at 4,060.
Asian Markets
Asian markets generally advanced yesterday, and are set to follow through today. Investors remained cautious though, with concerns over the Middle East, the North African unrest and soaring crude oil prices and their potential impact on the global recovery. April NYMEX crude oil prices closed over $US102 a barrel in New York, the highest settlement since Sept. 26, 2008, but has eased overnight.
In China and Hong Kong markets were mixed as Chinese banks helped raise optimism after an upbeat earnings outlook and hopes the recent interest rate hikes in China will boost bank interest incomes.
Asian regional sentiment was buoyed by the U.S. indices finding support and the Federal Reserve’s Beige Book report of an improving U.S. economy and accelerating European manufacturing activity.
In Japan the market rose modestly, as investors remained nervous about a continuing spike in crude prices amid unrest in the Middle East and North Africa. South Korean equities staged a strong rebound as foreign investors were buoyed by solid industrial output data and went bargain hunting, as the market turned around following falls in the past 6 sessions. The buying was broad including the auto makers, construction and airline stocks.
In China the SSE Composite closed down -0.4% (or -10 points) at 2,903, while in Hong Kong the Hang Seng Index was up 0.3% (or 74 points) at 23,396 and in Japan the Nikkei 225 Index was up 0.9% (or 94 points) at 10,586.
Commodities
The Dollar Index was lower at 76.48 on a higher Euro, while the Australian Dollar last traded above parity at 101.23. Commodities were general higher.
For the session the Benchmark crude NYMEX for December delivery was down -0.4% (or -$US0.44) to settle at $US101.79. Copper prices are back at 2-year highs. Copper for December delivery was down -0.1% (or 0.5 cents) at $US4.4830. April gold was down -1.5% (or -$US21.20) at $US1,417.00.
ASX Market News
ASX – The corporate regulator says it expects the alternative stock exchange operator Chi-X Australia will begin operations later this year.
AUN – Shares in Austar United Communications climbed again, after the company said earlier in the week that its majority owner had held talks with Foxtel over a possible takeover bid.
BHP – BHP has proposed a US$4.75 billion acquisition of Chesapeake Energy (CHK) which may only the beginning of the BHP’s move into U.S. shale gas, according to UBS.
DOW – Ratings agency Fitch has resolved its negative rating watch on Downer EDI, praising the work of its new management team and has played down the impact of a troubled train project on future work.
FKP – IOOF Holdings (IFL) has increase its stake in FKP from 5.6% to 7.9%.
GNS – Woodchipper Gunns Ltd is in a trading halt, pending an announcement in relation to its proposed pulp mill at Bell Bay in northern Tasmania.
MMX – WA Premier Colin Barnett says a Chinese investor may still jump aboard the Oakajee port and rail project after granting the founding partners more time to finalise the project.
NWS – News Corp has offered to sell its Sky News TV channel to clear the way for the media giant’s proposed bid to gain full control of British pay-TV giant BSkyB.
STO – NAB has announced it has acquired a 6.4% stake in Santos.
Local Corporate Reporting
None
Ex-dividend Date
AHD – Amalgamated Holdings
AIO – Asciano Limited
APN – APN News & Media
BEL – Bentley Capital Ltd
CGF – Challenger Limited
LLC – Lend Lease Group
MLD – MACA Limited
PRO – Prophecy Internation
QBE – QBE Insurance Group
SHL – Sonic Healthcare
SHV – Select Harvests
Market Summary
ASX – to open sharply higher
US & UK/Europe – higher
US ADRs – Broadly Higher
Commodities Stock Index up 1.3%
Gold Stocks Index down -1.1%
Oil Stocks Index up 1.8%
By Michael Hevern
Head of Research
