Australian Market Leads - 04/30/2012

Hope springs from global markets and is seen cascading towards the Australian domestic markets with key commodities stocks gaining with the weaker US dollar. Analysts from IG Markets, Comsec and Morrison Securities share their views for this week.

Markets in the U.S. and EU shrugged off the Spanish downgrade and weak turnout of the U.S. GDP and finished off the Friday session on a higher note. Investors took in the positive results from the the Italian 5- and 10-year bond auction, according to IG Markets strategist Stan Shamu.

"Strong US company earnings results and rising hopes that the Fed will usher in QE3 to support the sagging US economy," Mr. Shamu further comments.

The Dow Jones Industrial Average was up 0.2% at 13228. The S&P was 0.2% higher at 1403, whilst the NASDAQ climbed 0.6% to finish at 3069.

According to Morrison Securities, "the Dow rose 1.5% during the week, while the S&P 500 climbed 1.8%, Friday's trading pushed Dow industrials into positive territory for the month. Should the 0.1% gain hold through Monday, blue chips would finish April with their seventh straight monthly advance, the longest streak in five years."

Althought the rise in the U.S. indices led to a weaker dollar, this bode well for key commodities including copper rising 1.5%, while the BHP ADR pointed to a 1% gain at the open to $35.24.

Analysts are keen to watch out for the announcement of the National Australia Bank today reporting on the outcome of its UK banking strategic review.

Others on the radar are JB Hi-Fi with potential broker ratings changes after announcing yet another earnings downgrade last week. ResMed was one of last week's best performers following its quarterly results, and the momentum might continue after it received some broker upgrades this morning.

Should the market break through the 4400 today, it will manage to break through the October 28 high of 4417 will be the next level to keep an eye on.

On the economic front, the private sector credit and new home sales data due out. However, focus will remain firmly on tomorrow's RBA interest rate decision. The data really ramps up tomorrow, with China manufacturing PMI also due out and expected to come in at around 53.6. Elsewhere in the region, Chinese and Japanese markets are closed for holidays today.

Mr. Shamu of IG Markets took note that "the Aussie dollar surged on Friday, with AUD/USD breaking through 1.04 and rising to a high of 1.04750. The pair is still hanging at around those highs, with plenty of event risk on the way this week."

From IG MARKETS: