Australian Stock Market Report - Morning January 30, 2015

In US economic data, pending home sales fell by 3.7 per cent in December. US jobless claims fell by a larger-than-expected 43,000 to 264,000 last week - marking the lowest result since April 2000.

European shares were mixed as the slide in energy stocks was offset by a recovery in Greek shares. Royal Dutch Shell fell by 4.3 per cent after missing profit forecasts. The STOXX 600 oil & gas index fell by 2.8%. The Greek ATG index lifted by 3.2% after broker comments claimed there was value in that market. The index had fallen by 9.2% in the prior session. The FTSEurofirst 300 index fell by 0.1% while the German Dax was up by 0.8% and the UK FTSE lost 0.2%. Mining shares were weaker in London with BHP Billiton down by 0.6% while Rio Tinto fell by 0.3%.

US sharemarkets rallied in afternoon trade on Thursday after a volatile session. Earnings seasons continued to roll on and shares in Alibaba dropped 9% after missing revenue expectations. Chipmaker Qualcomm lost 11.4% after trimming its 2015 outlook. At the close of trade left, the Dow Jones was up by 226 points or 1.3%, the S&P 500 index was up by 1% and the Nasdaq was up 45 points or 1%.

US treasury prices were weaker (yields higher) on Thursday as the upbeat labour market data improved risk sentiment. US 2 year yields rose by 4 points to 0.52% while US 10 year yields rose by 4 points to 1.76%.

Major currencies were generally weaker against the greenback in late US trade on Wednesday. The Euro was the exception, lifting from US$1.1265 to and US$1.1365 and was near US$1.1315 in afternoon US trade. The Aussie dollar eased from highs near US78.90c to lows around US77.20c and was near US77.65c in afternoon US trade. And the Japanese yen weakened from 117.60 yen per US dollar to JPY118.50 and was near JPY118.35.

World oil prices recovered from early losses on Thursday as traders digested the sharp lift in inventories. The Nymex oil price fell below US$44 a barrel for the first time since April 2009. At the close the Brent crude price was higher by US74c or 1.5% to US$49.21 a barrel while the US Nymex crude price rose by US8c or 0.2% to US$44.53 a barrel.

Base metal prices fell by up to 1.7% on Thursday with aluminium leading the declines. Copper lost 1.6% while lead gave back 1.5%. Gold fell with Comex gold futures price down by US$31.30 an ounce or 2.4% to US$1,254.60 per ounce. Iron ore fell by US40c or 0.6% on Thursday to US$62.30 a tonne.

Ahead: In Australia, producer price data and private sector credit figures are released. In the US, the university of Michigan confidence figures are released.

Craig James

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