Australian Stock Market Report: Morning Report

Dutch bank ING is going to split its Finance and Insurance businesses. ING will sell its insurance business and sell $11.3 billion of stock to repay government aid.

The South Korean economy grew by 2.9pct in the September quarter - the fastest pace in seven years.

European shares eased for a third straight day on Monday. A firmer greenback weighed on commodity prices and resource stocks. And ING lost 18pct on news of a spilt up. The FTSEurofirst index fell by 1.2pct with the UK FTSE down 1.0pct and the German Dax lower by 1.7pct.

US sharemarkets fell on Monday. Energy stocks fell in line with a lower oil price with shares in Chevron down 1.6pct. And homebuilding stocks fell on fears that a tax credit for first home buyers wouldn´t be extended. The US Dow Jones fell by 104 points or 1.1pct with the S&P 500 down 1.2pct and the Nasdaq was lower by 0.6pct.

US treasuries fell on Monday (yields higher) as investors fretted about the ability of markets to digest $US$123 billion of bond issuance over the week. Encouragingly there was solid demand today for US$7 billion in 5yr inflation-protected notes. Treasury will sell $44 billion of 2yr notes on Tuesday. US 10yr yields rose by 8pts to 3.565pct with US 2yr yields up 1pt to 1.03pct.

The US dollar rose against major currencies as investors shifted away from growth assets like equities and commodities. The Euro fell from highs near US$1.5040 to US$1.4845, ending US trade near its lows at US$1.4860. The Aussie dollar fell from highs near US92.65c to US91.25c, ending US trade near the day´s lows at US91.50c. And the Japanese yen eased from around 91.70 yen per US dollar to almost JPY92.30, ending trade near the weakest levels at JPY92.20.

Crude oil prices fell on Monday in response to a stronger greenback. A stronger US dollar reduces the purchasing power for raw material buyers in Europe and Asia. The Nymex oil contract fell by US$1.82 or 2.3pct to US$78.68 a barrel. And London Brent crude fell by US$1.66 to US$77.26 a barrel.

Base metal prices were mixed on the London Metal Exchange on Monday with a firmer greenback restraining investor interest in commodities. While lead lost 2.2pct and nickel eased 1.8pct , zinc and aluminium were up between 1-2pct. And the price of gold tumbled in line with a firmer greenback and lower oil price with the Comex quote down US$13.60 an ounce to US$1042.80.

Ahead: In Australia, annual general meetings dominate the calendar including Worley Parsons and Transurban. In the US, consumer confidence and house price data is released..