The Australian sharemarket ended in negative territory for the
first time in four sessions today. The All Ordinaries Index (XAO)
fell 0.3 pct or 14.1 pts to 4430.3. Today was also one of the
quietest starts to a new trading week this year. Local shares
attempted a comeback at lunch, following a report in China
showing a slight improvement in China's manufacturing sector.
All sectors except the telcos lost some ground today. The
world's biggest miner, BHP Billiton (
) fell 0.51 pct or 18 cents to $35.32 today, while the smaller
Rio Tinto (
) ended 2 cents higher.
Three of the four major banks rose ever so slightly today,
which helped limit the losses on the broader market. National
Australia Bank (NAB) eased by 0.44 pct or 11 cents to $25.08.
Qantas (QAN) CEO, Alan Joyce today has pledged to add as many
flights as required to help maintain its significant 65 pct
market share of Australia's domestic market. Mr Joyce is also
pushing for a second Sydney Airport to be built as soon as
possible, due to congestion. QAN shares fell 2.12 pct or 3.5
cents to $1.61 today but are still up around 10 pct in 2012.
One of the country's largest uranium companies, Paladin Energy
) said it will be raising US$225 million worth of funds via a
bonds issue. The funds are expected to be partly used to fund
projects in Africa.
Treasurer Wayne Swan has returned from Washington and has
agreed to contribute another $7 billion to the International
Monetary Fund (
). An additional $430 billion has been pledged by global nations,
with around half of which came from the Eurozone. Interestingly,
it is likely to receive a big chunk of those funds via loans from
the IMF eventually.
On the economic front today, a report has shown that due (in
part) to a stronger Australian dollar (
), the prices that businesses are paying for goods have fallen
for the first time since late 2009. Import prices fell by 1.5 pct
last quarter. This perhaps would make the Reserve Bank of
Australia (RBA) feel slightly more comfortable to cut interest
rates next week for the first time this year.
Tomorrow, the all-important Consumer Price Index (CPI) will be
issued at around lunch. Today's business inflation report (PPI),
makes it more likely that CPI will come in towards the lower end
of market expectations.
Commsec Economist, Savanth Sebastian said that "It is clear
that the strength of the Australian dollar has been a key factor
in keeping down the cost of imported goods. In fact prices of
imported goods recorded the biggest quarterly fall in five
quarters. And looking forward the ongoing strength of the dollar
should ensure that imported inflation remains subdued. Given the
sluggish domestic environment, the cheaper prices for imported
goods have provided retailers with a life-line. (This is)
providing domestic business with the ability to discount goods in
order to entice consumers."
Commsec's Chief Economist, Craig James issued the quarterly
State of the States report, which was created to find out the
standing of Australian states and territories based on a number
Mr James said that "Western Australia comes out top on five of
the eight criteria. The worst results were being ranked fourth on
two of the eight indicators. So when discussing the Australian
economy it is best to focus on two concepts: total Australia, and
Australia excluding Western Australia. Western Australia leads
the way on economic growth, construction work, unemployment,
retail trade and equipment investment and second-ranked on
population growth. Only in terms of dwelling starts and housing
finance is Western Australia middle-ranked across Australia's
state and territory economies. Queensland continues to creep up
the performance rankings, together with NSW, and they are now
alongside South Australia. Queensland is benefitting from
rebuilding work while it is also second ranked on economic
growth. NSW is solid in a relative sense on population growth and
housing finance. South Australia does best on unemployment while
it remains middle ranked on other indicators."
It will be a quiet week for economic reports this shortened
trading week. The Aussie market will be closed on Wednesday due
to the Anzac Day public holiday.
All markets except shares in the Philippines lost a little
ground today. A report released by HSBC showed that China's
manufacturing industry improved a little this month compared to
March, however is still showing signs of contraction. The more
important official government report will be out next Tuesday
morning. Today's report focused on small and medium businesses
while the official government figures also include larger Chinese
This Friday will be the busiest day of the week in Japan. The
Bank of Japan (BOJ) will be meeting for the second time in April.
It will publish its forecasts for the Japanese economy, which
could give insight into the likelihood of additional monetary
easing. This will also be accompanied by retail sales, inflation
and an update on household spending in Japan.
In Europe, politics will remain in focus with the G7 meeting
also being held this week. Yesterday in France, the first round
of the French elections took place and narrowed the race to just
two potential candidates. The Socialist party's Francois Hollande
finished first while the current President, Nicolas Sarkozy ended
a close second. The biggest surprise perhaps was that the extreme
right party called Le Front National (The National Front) came in
third with 20 pct of the vote. The attention now turns to May 6,
when the second and final round will take place. Either Nicolas
Sarkozy or Francois Holland will be the President of France.
While this might not seem important, political uncertainty and
changes in Europe will likely keep investors on edge. The Greek
elections will also take place in the first week of May.
In the U.S, 762 companies will be announcing their profit
numbers for the first quarter of the year (January to March 2012)
this week. Apple (AAPL;us) will be the largest company to release
its earnings. To put the size of Apple in perspective for you, it
is larger than BHP Billiton (
), Rio Tinto (
), the four big banks, Teltra (TLS), Westfield (WDC) and
Woolworths (WOW) put together.
Tonight, a number of reports on the state of the Eurozone's
manufacturing industry will be issued. In the U.S, 61 companies
will be releasing their results including ConocoPhillips and
Volume of shares traded came in at 2.09 billion today, worth
just $2.77 billion. 434 shares were up, 570 were weaker and 404
At 4.30pm AEST on the Sydney Futures Exchange, the ASX24
futures contract is down 0.37 pct or 16 pts to 4342.
Due to daylight savings, most major European markets are now
trading between 5pm (AEST) and 1.30am (AEST). Futures in Europe
are pointing to a weaker start to trade tonight.
Dow Futures are currently also lower, indicating that U.S
stocks could open in the red tonight. Due to daylight savings
taking place in the second week of March in North America and the
end of daylight savings in Australia, U.S markets will now be
trading between 11.30pm (AEST) and 6am (AEST).
Turning to currencies, the Australian dollar (
) buys US103 cents and has lost significant ground against the
greenback since this morning. At 10am (AEST) this morning, the
AUD was at US103.8 cents. The AUD is currently trading at £64
pence and €78.4 cents.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily