The Australian sharemarket kicked off the new week in the red,
with the All Ordinaries Index (XAO) down 0.2 pct or 9.9 pts to
4354.2. Weakness from the miners and energy players dragged the
market lower today. On a positive note, we are almost 10 weeks
into the year and local shares have improved by 5 pct. The
Brazilian market has been one of the standouts and has gained by
19 pct in 2012 while German shares have jumped by 17 pct.
The S&P/ASX 200 Materials index (a measure of stock
performance in the mining sector) fell 0.83 pct or 93.2 pts to
11196.1. Rio Tinto (
) lost 1.27 pct or 84 cents to $65.09 while the larger BHP
) fell by 0.84 pct or 30 cents to $65.09.
The major banks were mostly lower in the second half of trade
however ended mixed by the close. ANZ Banking Group (ANZ), was
the best performer after rising by 0.91 pct or 20 cents to
$22.20. National Australia Bank (NAB) edged higher by 0.34 pct or
8 cents to $23.53, while the other two majors ended largely
The retailers were mixed, with David Jones (DJS) and JB Hi-Fi
(JBH) managing to end a little higher.
Queensland based insurance company, Suncorp (
) said it received 500 claims from flood victims across NSW,
however only eased slightly today. At the end of last month, SUN
recorded a 74.4 pct rise in first half profit (July to December
2011) to $389 million. This was better than market consensus.
Singapore Telecomm (SGT) said it will buy a U.S based provider
of mobile advertising solutions for US$321 million today. This
will be its first major acquisition since 2007 and its shares
ended flat today.
On the economic front today, the latest inflation gauge,
services index, job advertisement and company profit numbers were
released in the first half of the session.
The number of job advertisements rose by 3.3 pct in February,
adding to the 7.5 pct improvement recorded in January. Commsec's
Chief Economist, Craig James said that "Job ads have now risen
three times in the past eight months. Job ads are up 3.6 per cent
on a year ago. Newspaper job ads actually fell by 8.6 per cent in
February, while the far larger component of internet job ads rose
by 3.8 per cent."
Inflation hit a 2-year low today and the Performance of
Services index slumped by 5.3 pts to 46.7 in February.
The start of a new season and month tends to be a busy time
for economic news, and this week will be no different. Tomorrow,
the Reserve Bank of Australia (
) will be meeting to make a decision on interest rates. The
market is expecting rates to remain on hold at 4.25 pct, with a
20 pct likelihood of a rate cut being factored in by the
On Wednesday, the latest GDP (economic growth) reading will be
announced and the market is forecasting a 0.8 pct expansion for
the Australian economy.
February's employment and unemployment report is expected to
be issued on Thursday. The jobless rate is likely to remain
steady at around 5.1 pct and around 15,000 jobs are forecast to
have been added over the month.
International trade numbers for January will be issued on
Friday and a $1.4 billion surplus is expected over the month.
No major economic data was scheduled for release in the region
today; however a number of reports will be issued in the latter
part of the week. Shares in Thailand will not be trading on
Wednesday due to a public holiday, while the Indian markets will
be shut on Thursday. In Japan, the latest GDP (growth) reading
will be delivered for the previous quarter. The market is
expecting the Japanese economy to have contracted by around 0.2
pct over the three months between October and December last
On Friday, a barrage of economic indicators will be issued in
China. This will include the latest inflation reading (
), in addition to retail sales and the world's second largest
economy's trade balance (exports minus imports). This data tends
to be market moving for most global markets if the results
surprise investors and market participants.
Last week, shares in China rose by 0.86 pct, 0.73 pct in Hong
Kong, 1.34 pct in Japan, however eased by 0.57 pct in
In Europe tonight, the latest retail sales report will be
issued for January while the Sentix Investor Confidence index
will be calculated at 8.30pm (AEDT). This is a survey of around
2,800 investors and analysts which asks about the economic
outlook for the Eurozone. A reading above 0.0 indicates optimism.
The market is expecting investor confidence to have slumped by
approximately 5.7 pct over the month.
Looking ahead, on Thursday both the Bank of England and the
European Central Bank (ECB) will be holding their monthly
meetings on monetary policy. Both central banks (their
equivalents of Australia's Reserve Bank) are expected to keep
rates on hold. On Friday, the final approval for the full amount
of the second Greek bailout package is expected to occur.
In the U.S tonight, a report on the change of factory orders
will be issued, however the big piece of data to be delivered
will be on Friday night with the latest non-farm payrolls (jobs
report) to be issued. The market is expecting an additional
200,000 jobs to have been created in February and for the
unemployment rate to remain steady at 8.3 pct.
Activity was light today, with the volume of shares traded
coming in at 1.78 billion today, worth $3.48 billion. 469 shares
were up, 522 were weaker and 417 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24
futures contract is down 0.05 pct or 2 pts to 4266.
Due to daylight savings, most major European markets are now
trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe
are pointing to a slightly weaker start to trade tonight.
Dow Futures are currently lower; indicating that U.S stocks
could open weaker tonight. American markets open at 1.30am
(AEDT). Due to the Americans going back an hour on November 5
last year, U.S markets will be trading between 1.30am (AEDT) and
Turning to currencies, the Australian dollar (AUD) buys
US107.1 cents. The AUD is currently trading at £67.7 pence and
Steven Daghlian, CommSec Market Analyst
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