Market Wrap for Tuesday 29th September 2009

The Australian share market has ended firmly in the black, after a series of announced mergers in the US lifted optimism. At the close, the benchmark S&P/ASX200 index was up 75.7 points, or 1.6 per cent, at 4753.1, while the broader All Ordinaries gained 70.3 points, or 1.5 per cent, at 4747.2. All sectors were higher, with information technology leading the way, up 3.6 per cent, followed by financials at 2.0 per cent, while materials gained 1.6 per cent.

Australia’s budget deficit for the year ending June 30, 2009, was A$27.1 billion ($23.7 billion) Treasurer Wayne Swan said. This compares with a A$32.1 billion forecast he made in May. “This stronger-than-expected outcome is the result of a combination of various one-off factors and the effects of the government’s economic stimulus,” Swan said today in Canberra.

Interest rates at a half-century low, government spending on roads and schools, plus handouts to consumers helped the economy expand 1 percent in the first half of this year, boosting earnings at retailers such as Woolworth’s Ltd. Australia’s net debt was A$16.1 billion, which was A$11.5 billion less than forecast in May and equivalent to 1.3 percent gross domestic product.

U.S. stocks rallied on Monday, snapping a three-day losing streak, as a spurt of corporate takeovers in the technology and health-care sectors fueled optimism about share values. Mergers and acquisitions are typically viewed as bullish as it suggests companies are more optimistic about the business outlook.

The Dow Jones industrial average rose 124.17 points, or 1.28 percent, to end at 9,789.36. The Standard & Poor’s 500 Index gained 18.60 points, or 1.78 percent, to 1,062.98. The Nasdaq Composite Index shot up 39.82 points, or 1.90 percent, to 2,130.74.

With Monday’s gains, the Dow Jones industrial average held an advance of about 16 percent in the quarter so far, which would make it the index’s best such period since the fourth quarter of 1998. But the end of the third quarter on Wednesday may spur volatility as fund managers engage in what is known as “window dressing” — when they sell laggards in favor of outperformers to spruce up portfolios at quarter’s end.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Monday 28th September 2009

The Australian share market has ended lower as investors sought more evidence of improving company performance to justify the recent run to a 12-month high. At the close, the benchmark S&P/ASX200 index was down 35.9 points, or 0.8 per cent, at 4677.4, while the broader All Ordinaries fell 37.9 points, or 0.8 per cent, to 4676.9.

TPG Inc. and Blum Capital plan to sell their stake in Myer Group in Australia’s biggest initial public offering in two years as buyout firms seek to profit from the stock market’s 50 percent rally since March. Myer, Australia’s largest department store, plans to raise as much as A$2.34 billion ($2 billion) selling shares at A$3.90 to A$4.90 each, it said in a prospectus today. The stock will be offered at 14.3 to 17.3 times forecast earnings, compared with a 17.2 multiple for David Jones Ltd., Myer’s biggest rival.

Texas-based TPG, which teamed up with Blum and members of the Myer family to buy the retailer in 2006 for A$1.4 billion, will test demand for new shares after the biggest drought of IPOs in 16 years. The sale may herald a run of offerings by private- equity-owned retailers, contributing to more than A$10 billion in capital raisings by June 2010, according to UBS AG.

The rally in U.S. stocks, which stumbled in recent days on worries about the economic recovery and continued government stimulus, will be tested this week by crucial data on growth and jobs. Investors are set to pore over September non-farm payrolls, the final reading of second-quarter gross domestic product and several other big economic reports.

The data comes amid signs the rally in stocks, which has lifted the Standard & Poor’s 500 index .SPX some 54 percent since early March, could be fizzling out. The market suffered three straight days of losses last week and the S&P put in its biggest weekly drop since early July, with data on Friday showing new orders for long-lasting U.S. manufactured goods falling by their biggest margin in seven months.

This week the focus likely will be on Friday’s monthly U.S. government jobs data. The 9.7 percent U.S. unemployment rate is a major concern for investors because of the impact on the economy and, in particular, consumer spending.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Wednesday 23rd September 2009

The Australian share market climbed 1.5 per cent today, led by oil and gold stocks. At the close, the benchmark S&P/ASX200 index was up 70/4 points, or 1.5 per cent, at 4734.1, while the broader All Ordinaries rose 69.9 points, or 1.5 per cent, to 4741. Gains were across all sectors, with energy shares jumping 2.2 per cent, materials up 1.2 per cent and financial gaining 1 per cent.

Gold advanced as a weakness in the dollar bolstered the precious metal’s appeal as an alternative investment. The dollar declined to a one-year low against the euro on speculation Federal Reserve policy makers will signal today they will keep interest rates low. The U.S. currency fell against 13 of 16 major counterparts on concern that Group of 20 leaders, meeting in Pittsburgh starting tomorrow, will call for a reduction in global trade imbalances that may cause further gains in other currencies. Gold for immediate delivery gained as much as 0.5 percent to $1,019.03 an ounce and traded at $1,015.97 at 9:54 a.m. in Singapore. The metal reached a record high of $1,032.70 in March 2008.

U.S. stocks rose on Tuesday, as investors bet the U.S. Federal Reserve will stick to its accommodative policy to foster economic recovery, boosting growth-sensitive sectors such as financials, technology and industrials. The gains were broad-based, with all but three of the 10 S&P 500 industry sectors ending higher. Energy and other natural resources stocks were underpinned by resurgent global commodity prices as the U.S. dollar retreated.

The Federal Reserve began a two-day policy-setting meeting on Tuesday. Its policy statement is due on Wednesday around 2:15 p.m. (1815 GMT). With no change expected in interest rates, investors probably will focus on the bank’s assessment of the economic outlook, particularly after Chairman Ben Bernanke said last week that the recession was “technically” over.

The Dow Jones industrial average gained 51.01 points, or 0.52 percent, to end at 9,829.87. The Standard & Poor’s 500 Index rose 7.00 points, or 0.66 percent, to 1,071.66 – a fresh 11-month closing high. The Nasdaq Composite Index climbed 8.26 points, or 0.39 percent, to 2,146.30.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Tuesday 22nd September 2009

The Australian share market has ended 0.3 per cent lower, led down by the energy sector and following weak overseas leads. At the close, the benchmark S&P/ASX200 index was down 13.7 points, or 0.3 per cent, at 4663.7 points, while the broader All Ordinaries index slipped 13 points, or 0.3 per cent, to 4671.1 points. Among the sectors, energy stocks dropped 1.4 per cent, materials were down 0.3 per cent and financial shares fell 0.2 per cent.

Australia, the world’s largest shipper of coal, iron ore and wool, kept its forecast for a decline in commodity exports this fiscal year little changed on a fall in contract prices for bulk commodities. Sales may be A$158 billion ($137 billion) in the year ending June 30, 2010, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in an e-mailed statement. That compares with its June estimate of A$160 billion and a revised A$197 billion for the previous year.

Australia’s export earnings for energy and minerals, at the second-highest on record, will be 23 percent lower than a year earlier, mainly due to lower contract prices for bulk commodities. Economic activity has picked up in China and other emerging Asian economies and is expected to strengthen in the next few quarters, the bureau said.

The Dow industrials and the S&P 500 index fell on Monday as a drop in oil and other commodity prices hurt energy and materials stocks. But the Nasdaq rose, buoyed by a broker’s upgrade in the biotechnology sector. Light crude futures fell more than 3 percent, settling below $70 a barrel, hurt by concerns about demand despite hopes for economic recovery. The Reuters-Jefferies CRB index of commodities tumbled 2.2 percent, its largest percentage drop in five weeks. The dollar index rose 0.5 percent after three weeks of declines and further hurt commodity prices, as investors scaled back short positions in anticipation of the Federal Reserve’s decision on interest rates later this week.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Monday 21st September 2009

The Australian share market has ended lower as profit takers moved in after last week’s strong rally. But companies with exposure to the United States economy bucked the trend by showing strong gains. At the close, the benchmark S&P/ASX200 index was down 15.8 points, or 0.3 per cent, at 4677.4, while the broader All Ordinaries lost 9.6 points, or 0.2 per cent, to 4684.1.

Gold slipped further on Monday after failing to revisit last year’s record around $1,030 an ounce, wth sluggish offtake from jewellers across Asia stepping up the selling pressure. Gold rallied to $1,023.85 on Thursday, its strongest since March 2008, on uncertainties over the sustainability of the global economic recovery, but the dollar’s rebound from a 1-year low against the euro eventually spurred selling. Spot gold was quoted at $1,004.25 an ounce by 0214 GMT, down $1.90 from New York’s notional close on Friday. Bullion has gained as much as 16 percent this year.

U.S. stocks could extend their rally and the Dow industrials may climb above 10,000 this week, should the Fed’s policy-makers and economic data support the view the economy is recovering from recession. The Federal Open Market Committee will meet on Tuesday and Wednesday, with investors anxiously awaiting the policy-makers’ assessment of whether the economy is improving.

The week’s key economic data will include U.S. existing home sales, new home sales, a report on new orders of durable goods such as washing machines and refrigerators, and a final reading for September on consumer sentiment – all likely to put the expectations for recovery to the test. A raft of initial public offerings are also expected to price, making it the biggest week for initial public offerings in the United States in nearly two years in a sign of growing confidence in the market.

Source: Fairfax, Reuters

Market Wrap for Thursday 17th September 2009

Australian shares have ended the day 1.4 per cent higher as investors pushed up resources stocks on optimism that global growth will recover more quickly than expected. At the close, the benchmark S&P/ASX200 index was up 64.5 points, or 1.4 per cent, at 4714.9, but off the day’s high of 4749.7. The broader All Ordinaries gained 61.2 points, or 1.3 per cent, to 4714. All sectors were higher, with financial stocks jumping 1.6 per cent, materials up 1.4 per cent and energy shares gaining 0.7 per cent.

U.S. stocks rose for a third day on Wednesday, hitting fresh 2009 highs in a broad-based rally following economic data that suggested a stronger-than-anticipated global recovery. Energy and manufacturing companies were among the strongest, benefiting from data indicating improved industrial demand and a falling dollar, which makes American exports more competitive in world markets.

The Dow Jones industrial average was up 108.30 points, or 1.12 percent, at 9,791.71. The Standard & Poor’s 500 Index was up 16.13 points, or 1.53 percent, at 1,068.76. The Nasdaq Composite Index was up 30.51 points, or 1.45 percent, at 2,133.15.

Volume was above average on the New York Stock Exchange, with 1.58 billion shares changing hands, above last year’s estimated daily average of 1.49 billion, while on the Nasdaq, about 2.76 billion shares traded, higher than last year’s daily average of 2.28 billion.

European stock index futures pointed to a higher open on Thursday, gaining ground for the ninth time in 10 sessions, tracking strong gains on Wall Street overnight and in Asia on renewed recovery hopes. Futures for the Euro Stoxx 50 and German DAX futures were both up 0.7 percent and French CAC futures were up 0.6 percent.

Source: Fairfax, Reuters

Market Wrap for Thursday 10th September 2009

The share market ended more than 1 per cent higher as hopes of an economic recovery lift sentiment. Gains had earlier been trimmed following employment data that showed more job losses than expected. At the close, the benchmark S&P/ASX200 index was up 48.6 points, or 1.1 per cent, at 4570.8, while the broader All Ordinaries rose 46.4 points, or 1 per cent, to 4573.5.

Australian employment fell in August by almost twice as much as economists estimated, driving down the nation’s currency on expectations the central bank won’t raise interest rates anytime soon. The number of people employed dropped 27,100 from July, when it rose a revised 33,700, the statistics bureau said in Sydney today. The median estimate of 21 economists surveyed by Bloomberg was for a decline of 15,000. The jobless rate held at 5.8 percent.

Falling employment adds to signs the economy may slow in coming months after reports yesterday showed retail sales unexpectedly fell in July and home-loan approvals ended a record nine-month run of gains as the effect of government stimulus spending wanes. Traders today pared bets on when central bank Governor Glenn Stevens will raise borrowing costs from a half- century low of 3 percent.

OPEC early on Thursday agreed to hold output targets steady after top exporter Saudi Arabia looked to economic strength to bolster the oil price and dismissed bulging inventories. As widely expected, the roughly three-hour meeting begun late on Wednesday saw no need to change production formally, although some OPEC members called for stricter compliance with existing curbs. From the outset, ministers, led by top exporter Saudi Arabia, said high oil prices of above $71 a barrel meant there was no need for action.

U.S. stocks closed higher for a fourth straight day on Wednesday, sending the Standard & Poor’s 500 index to its best finish so far this year as industrial and technology companies gained from a weak dollar. The Dow Jones industrial average was up 49.88 points, or 0.53 percent, at 9,547.22. The Standard & Poor’s 500 Index gained 7.98 points, or 0.78 percent, at 1,033.37. The Nasdaq Composite Index rose 22.62 points, or 1.11 percent, at 2,060.39.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Monday 7th September 2009

Australian shares advanced in afternoon trading, buoyed by banks and mining stocks. The benchmark S&P/ASX200 index ended the day up 18.9 points, or 0.4 per cent, at 4454.4, while the broader All Ordinaries rose 18.4 points, or 0.4 per cent, to 4461.1. Among key sub-indexes, energy shares were flat, while financial and materials added 0.7 per cent.

The gold price could soon rise to $US1000 an ounce following the recent rapid strengthening of its price, but is unlikely to remain above that level. Since Monday the local spot price of gold has jumped from $US951.20 per fine ounce to an early high on Friday of $US997.30, before retreating to a little below $US990 in afternoon trade. The all-time high of gold was set on March 17, 2008, when it hit a high of $US1030.80 per ounce.

A report from market researchers Forecast Ltd on Thursday said fearful investors worried about a market correction after recent gains may have been investing in gold. The report said other investment opportunities such as bonds and equities were increasingly viewed as expensive.

European equities were poised to rise on Monday, adding to the previous session’s rally and mirroring gains on Wall Street and in Asia, as investors applauded the G20’s pledge to maintain their economic stimulus plans. In a closing statement, the Group of 20 finance ministers and central bankers said they would not remove economic stimulus until the global recovery was well entrenched.

Financial spreadbetters expected Britain’s FTSE 100 to open 26 to 31 points higher, or as much as 0.6 percent, Germany’s DAX to open 33 to 41 points higher, or as much as 0.8 percent, and France’s CAC 40 to open 14 to 19 points higher, or as much as 0.5 percent. Traders expected thin volumes on Monday as U.S. markets will remain closed for a holiday.

Source: AAP, Fairfax, Reuters

Market Wrap for Friday 4th September 2009

Australian shares ended the day with minimal gains, as earlier gains among bank stocks fizzled. At the close, the benchmark S&P/ASX200 index was up 5.9 points, or 0.1 per cent, at 4435.5, after earlier rising as high as 4477. The broader All Ordinaries rose 9.8 points, or 0.2 per cent, to 4442.7. Among the major sectors, industrial stocks rose 1.2 per cent, financial gained 0.1 per cent, and materials slipped 0.1 per cent. Gold stocks jumped another 1.1 per cent on the back of yesterday’s strong gains.

Gold hovered just below $1,000 on Friday, taking a break after its strongest two-day performance since March as safe-haven demand stoked renewed investor buying. Worries about the global economy and the sustainability of this summer’s stock market gains have pushed bullion, traditionally a port of refuge during economic storms, up about 5 percent over the past two days to a six-month high on Thursday. The precious metal is on course for its biggest weekly gain since late April.

U.S. stocks rose on Thursday, snapping a four-day losing streak, after stronger-than-expected retail sales data eased concerns about the economy before Friday’s important jobs data. After sharp declines this week, the broad S&P 500 index finished above 1,000 as retailers’ August sales were complemented by a survey showing improvement in the U.S. services sector.

The Dow Jones industrial average was up 63.94 points, or 0.69 percent, at 9,344.61. The Standard & Poor’s 500 Index was up 8.49 points, or 0.85 percent, at 1,003.24. The Nasdaq Composite Index was up 16.13 points, or 0.82 percent, at 1,983.20.

Source: Fairfax, Reuters

Market Wrap for Thursday 3rd September 2009

The Australian share market has ended slightly lower, while gold stocks rallied following an overnight jump in the gold price. At the close, the benchmark S&P/ASX200 index was down 8.6 points, or 0.2 per cent, at 4429.6, after earlier dropping to 44410. The broader All Ordinaries fell 3.7 points, or 0.1 per cent, to 4432.9. Among the sectors, financial stocks were down 0.9 per cent and energy lost 0.6 per cent, while material rose 1.0 per cent and gold stocks jumped 7.2 per cent.

Pressure is mounting on central bank Governor Glenn Stevens to raise interest rates from a half- century low as soon as next month after a report yesterday showed the economy strengthened on surging consumer spending. Investors have a more than 100 percent expectation Stevens will boost borrowing costs in November by a quarter point to 3.25 percent, according to interbank futures on the Sydney Futures Exchange at 10:49 a.m. There is also a 28 percent probability of a move on Oct. 6, the futures show.

Australia’s economy unexpectedly accelerated in the second quarter at the fastest pace in more than a year as A$20 billion ($16.7 billion) of government cash handouts boosted spending at retailers such as Harvey Norman Holdings Ltd. Stevens may become one of the first policy makers in a developed economy to begin raising borrowing costs since the collapse of Lehman Brothers Holdings Inc. almost a year ago.

U.S. stocks fell on Wednesday as jitters about the economy prompted investors to unload some shares for a fourth-straight day even after a sharp drop in the previous session. Major indexes fluctuated between positive and negative territory throughout the day before closing in the red, with S&P 500 posting its worst losing streak since late May.

A labor-market report showing more private-sector job losses in August than forecast made investors nervous ahead of Friday’s highly anticipated monthly jobs data from the U.S. Labor Department. The weak data also prompted stock investors to shift some of their money into assets deemed safe such as precious metals, sending gold futures up to their highest level in almost three months.

The Dow Jones industrial average closed down 29.93 points, or 0.32 percent, at 9,280.67. The Standard & Poor’s 500 Index lost 3.29 points, or 0.33 percent, to 994.75. The Nasdaq Composite Index fell 1.82 points, or 0.09 percent, to 1,967.07.

Financial bookmakers expect the leading European benchmark indexes to fall for the fourth session on Thursday on renewed investor concerns over the pace of the global economic recovery. Financial spreadbetters expected Britain’s FTSE 100 to open 12 to 18 points lower, or down as much as 0.4 percent, Germany’s DAX to open 25 to 26 points lower, or as much as half a percent lower, and France’s CAC-40 to open 12 to 13 points lower, or down as much as 0.4 percent.

Source: Fairfax, Reuters

Market Wrap for Wednesday 2nd September 2009

The Australian share market fell nearly 2 per cent today, as investors focused on sinking overseas markets, ignoring better-than-expected economic figures. At the close, the benchmark S&P/ASX200 index was down 76.4 points, or 1.7 per cent, at 4438.2, well above the day’s low of 4412. The broader All Ordinaries fell 74.7, or 1.7 per cent, to 4436.6 points. Most sectors posted losses, with energy shares plunging 2.7 per cent, financial stocks losing 2.1 per cent and materials down 2.0 per cent.

Australia’s economic growth unexpectedly accelerated in the second quarter, driving the nation’s currency higher on expectations the central bank will raise borrowing costs from a half-century low. Gross domestic product rose 0.6 percent, the biggest gain in more than a year, from the previous three months when it grew 0.4 percent, the Bureau of Statistics said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg News was for a 0.2 percent expansion.

Today’s report confirms central bank Governor Glenn Stevens’ view that the economy has been “stronger than expected” as A$20 billion ($16.6 billion) of government cash handouts boosted spending at retailers such as Woolworths Ltd. and Harvey Norman Holdings Ltd. Australia joins other developed nations, including France and Germany, that are rebounding from the deepest global recession since the Great Depression.

U.S. stocks fell for a third straight day on Tuesday, spooked by uncertainty over the health of financials and concerns that the explosive rally since March may have run ahead of economic reality. September began living up to its reputation as the worst month for stocks as elevated anxiety pushed the three major indexes down 2 percent for the day, their worst percentage losses since Aug 17. Skepticism that stocks can add to a nearly 50 percent rally over the last six months prevailed in the market, sending the S&P 500 below the psychologically important threshold of 1,000.

Fears of a revival of balance-sheet troubles in the financial sector led to a sharp rise in the CBOE Volatility Index or VIX. Known as Wall Street’s favorite barometer of investor fear, the VIX shot up 12.1 percent to 29.15, the highest level since early July, as investors used options to take out protection against further declines in stocks.

The Dow Jones industrial average tumbled 185.68 points, or 1.96 percent, to close at 9,310.60. The Standard & Poor’s 500 Index fell 22.58 points, or 2.21 percent, to 998.04. The Nasdaq Composite Index slid 40.17 points, or 2.00 percent, to 1,968.89.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Tuesday 1st September 2009

Australian stocks closed at their highest levels since last October, led by banks, after the Reserve Bank left its key cash rate on hold. The benchmark S&P/ASX 200 index ended up 35.5 points, or 0.8 per cent, at 4514.6, the first time the gauge has closed above the 4500-point mark since October 7. The broader All Ordinaries rose 27.2 points, or 0.6 per cent, at 4511.3. Among the sectors, financial stocks rose 1 per cent, as did materials, while energy shares edged 0.1 per cent lower.

Australia’s central bank kept interest rates unchanged for a fifth month to spur an economy that probably cooled in the second quarter. Reserve Bank Governor Glenn Stevens left the overnight cash rate target at 3 percent in Sydney today, as forecast by all 17 economists surveyed by Bloomberg News.

Australia’s currency and bond yields fell as traders pared bets rates could be raised as soon as next month after Stevens said “the present accommodative setting of monetary policy remains appropriate for the time being.” Economic growth slowed in the second quarter as exports and inventories slumped, a report will show tomorrow, according to a survey of analysts.

Australia’s current account deficit widened more than expected in the three months through June as exports of coal, iron ore and farm goods tumbled. The shortfall on goods, services and investment more than doubled from the first quarter to A$13.3 billion ($11 billion), the most in a year, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg survey of 17 economists was for a A$10.7 billion gap. Exports tumbled 19 percent to A$47.6 billion in the quarter as shipments of rural goods slid 9 percent, coal slumped 26 percent and iron ore declined 21 percent, today’s report said.

U.S. stocks fell on Monday as concerns about the global economy’s health weighed on Wall Street following a sell-off in Chinese equities. Energy shares led the decline after the sharp drop in China’s main stock index, while oil slipped below $70 a barrel on increased worries about global energy demand.

Heading into a traditionally soft period of the year for stocks, investors are increasingly becoming more worried about a pullback after a 50 percent rally from multi-year closing lows in March. Despite the day’s lackluster performance, the Dow ended August up 3.5 percent, while the S&P 500 advanced 3.4 percent and Nasdaq gained 1.5 percent.

In Monday’s session, the Dow Jones industrial average fell 47.92 points, or 0.50 percent, to end at 9,496.28. The Standard & Poor’s 500 Index shed 8.31 points, or 0.81 percent, to 1,020.62. The Nasdaq Composite Index declined 19.71 points, or 0.97 percent, to close at 2,009.06.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Monday 31st August 2009

Australian stocks have ended the day lower, dragged down by the big miners and losses on regional share markets. At the close, the benchmark S&P/ASX 200 index was down 10.5 points, or 0.2 per cent, at 4479.1, after earlier rising as high as 4537.2. The broader All Ordinaries lost 11.8 points, or 0.3 per cent, to 4484.1.

Among the sectors, banking stocks gained 1.2 per cent, while materials fell 1.7 per cent and energy shares dropped 1.0 per cent. China’s benchmark stock index was down 5 per cent today, on track for a 21 per cent loss over the month. The Shanghai losses weighed on other markets, with the Nikkei dropping into the red after initially opening 2 per cent higher on the back of a historic victory by the opposition in Sunday’s elections.

Australia’s economy received mixed data signals with a surprisingly large drop in inventories likely to dent overall growth figures, while corporate profits also fell more than expected. Australian business profits fell in the second quarter by the most since 2003 and inventories tumbled as earnings slumped at mining and building companies.

Gross operating profits slipped 7.8 percent in the three months ended June 30 from the first quarter, the Bureau of Statistics said in Sydney today. The median estimate of 18 economists surveyed by Bloomberg was for a 4.5 percent decline. The Australian dollar fell to 84.10 U.S. cents at 12:39 p.m. in Sydney from 84.29 cents just before the report was released. The two-year government bond yield fell 4 basis points to 4.61 percent. A basis point is 0.01 percentage point.

Profits for mining companies tumbled 24.7 percent in the quarter and earnings for wholesalers fell 12.6 percent. Profits at builders slipped 6.1 percent. A separate report published today by the central bank showed lending by banks and other finance companies to businesses dropped 0.3 percent in July, the sixth straight month of declines.

European shares were seen losing ground on Monday,falling along with commodity prices, but volumes were expected to be low as London markets are closed for a holiday. Investors were keeping an eye on Japan, where a landslide victory for the opposition sent the yen rising strongly, weighing on shares of exporters. Tokyo’s Nikkei average was slightly lower in late trade after hitting an 11-month high. Financial spreadbetters expected Germany’s DAX to open around 34 points lower, and France’s CAC-40 to open around 21 points lower.

Source: Bloomberg, Fairfax, Reuters

Market Wrap for Thursday 28th August 2009

The Australian share market rose nearly 1 per cent today, buoyed by promising outlooks from companies including Harvey Norman, to cap another strong week with gains. At the close, the benchmark S&P/ASX200 index was up 38.8 points, or 0.9 per cent, at 4489.6 points, while the broader All Ordinaries index gained 37.8 points, or 0.8 per cent, at 4495.9 points.

U.S. stocks closed higher on Thursday as investors turned back an early sell-off, thanks to a rebound in oil prices. The Dow posted its eighth straight gain, led by Boeing Co (BA.N), which rose 8.4 percent to $51.82. The U.S. aircraft manufacturer said its long-delayed 787 Dreamliner would make its first flight by the end of the year.

For the first three days of the week, stocks rose early and fell later, but the pattern reversed on Thursday as shares built momentum throughout the session in tandem with assets identified with improved demand, such as crude oil. U.S. front-month crude oil prices CLc1 rose $1.06 to settle at $72.49 a barrel, after dipping as low as $69.83 earlier in the day.

The Dow Jones industrial average gained 37.11 points, or 0.39 percent, to end at 9,580.63. The Standard & Poor’s 500 Index added 2.86 points, or 0.28 percent, to 1,030.98. The Nasdaq Composite Index rose 3.30 points, or 0.16 percent, to 2,027.73.

Analysts have pointed to light summer volume and caution over a potential pullback as the reason for the market’s lackluster performance this week. Adding to that caution are concerns that an economic recovery may end up being weaker or slower than originally anticipated. Expectations of a recovery have fueled a months-long rally that has pushed the S&P 500 up more than 50 percent from March’s 12-year closing low.

Source: Fairfax, Reuters

Market Wrap for Wednesday 26th August 2009

The Australian share market had another strong day, following an encouraging lead from the US overnight and well received company reports. At the close, the benchmark S&P/ASX200 was up 48.7 points, or 1.1 per cent, at 4454.5 points, while the broader All Ordinaries index gained 46.9 points, or 1.1 per cent, to 4464.4 points.

Gains were across the board, with property trusts, up 4.6 per cent, and gold stocks, up 2.3 per cent, outperforming the rest of the market. Financials and materials both rose 1.3 per cent, while industrials stocks were the only sector to post a loss, slipping 0.1 per cent. Australia approved Chevron Corp.’s A$50 billion ($42 billion) liquefied natural gas venture on a remote island, adding stricter conditions to quell environmental concerns about the nation’s biggest resources project.

The additional terms for the Gorgon project will enable it to proceed within a nature reserve “without unacceptable impacts,” Environment Minister Peter Garrett said in Canberra today. Chevron has said the venture off the northwest shelf may produce its first LNG in 2014.

The decision clears one of the final obstacles to Chevron, Royal Dutch Shell Plc and Exxon Mobil Corp. building the venture on Barrow Island, 50 kilometers (32 miles) off the West Australian coast. Gorgon has contracts to supply fuel to China, India and Japan and is among more than 12 LNG projects in the region competing for Asian buyers.

U.S. stocks rose on Tuesday as economic data and the renomination of Federal Reserve chief Ben Bernanke reassured investors and offset concerns about red ink in the federal budget. The Conference Board’s August index of consumer confidence topped economists’ forecast, while the S&P/Case-Shiller home price index rose for a second consecutive month in June, suggesting a recovery in two sectors crucial to a rebound in U.S. economy.

The Dow Jones industrial average advanced 30.01 points, or 0.32 percent, to 9,539.29. The Standard & Poor’s 500 Index gained 2.43 points, or 0.24 percent, to 1,028.00. The Nasdaq Composite Index rose 6.25 points, or 0.31 percent, to 2,024.23.

The three major indexes closed at 2009 highs, although they were off the year’s intraday highs reached after the stronger-than-expected economic data. But in a repeat of Monday’s action, the rally cooled somewhat in the afternoon. The broad S&P 500 index briefly hit a 10-month intraday high. It remains on track for its sixth straight monthly gain.

Source: Fairfax, Bloomberg,Reuters