Australian Stock Market Leads - 02/08/2012
The positive leads from U.S. markets may not impact much on local stocks especially the currency-sensitive ones with the rate pause initiated by the Reserve Bank of Australia (RBA), analysts say.
The negative take of investors on the RBA's decision has already been seen on Tuesday's finish, which recorded a decline. Market analysts from IG Markets, CMC Markets, and OptionsXpress by Charles Schwab note that this disappointing move on the part of the RBA will still dwell on Wednesday's market trends.
Although the rate pause, which keeps benchmark rates at 4.25 percent, will bode well for the Aussie dollar, some investors are wary on its impact on the local industries especially the property and construction sectors.
IG Markets analyst Stan Shamu says the beneficiaries of the RBA's rate pause are risk assets of the mining sector.
"However, with risk assets (particularly in the commodities space) gaining ground overnight, we are likely to see an early bounce for Australian shares. BHP Billiton reported its first-half results this morning. At first glance it seems it slightly missed analysts' underlying earnings forecasts. The interim dividend of 55 US cents also missed expectations of 57 US cents. Encouragingly, BHP beat consensus on iron ore (US$7.9 billion versus US$7.77 billion expected) and petroleum (US$3.9 billion versus US$3.2b anticipated). However, it slightly missed in the coal division, which is not a big surprise," notes Shamu.
Shamu adds that ahead of the open, we are calling the Aussie market up 0.4% at 4292. He says that having failed to successfully defend early gains this week we might see the market drift through the session.
Ben Le Brun, market analyst at OptionsXpress points out that the Greek debt resolution is another hurdle to negotiate as it drags on and on. T
"There is little doubt that should Greece come to an agreement with private debt holders and agree to tough austerity measures this would be viewed favourably in risk asset markets,".adds Le Brun.