Australian Stock Market Leads - 03/26/2012

The positive leads from global markets led by the rise in the U.S. equities Friday have not provided enough boost to prop up the sentiment in the Australian stock market early on Monday.

The Australian market went off with a soft start and as of 10AM, shares traded flat but the bond markets establishing some substantial gains.

The Bank of Queensland announced that it would be on a trading halt today after it reported a $91million loss for the first quarter due to the swelling of loan impairments during the period. The bank said it plans to raise $450 million to deal with these impairment costs and has flagged results for the 6 months to 29 January.

Analysts have warned about the overwhelming skepticism rising from Spain that could trigger the European debt crises. Europe's area ministers are set to meet this week to discuss the region's financial firewall.

According to IG Markets strategist Stan Shamu, the U.S. dollar's weakness pushed commodities up on Friday and could bode well for commodities-related stocks. Nonetheless, Mr. Shamu pointed out that " BHP's ADR is pointing to a 0.6% fall at the open."

"This makes the leads fairly confusing, considering the mild improvement in risk appetite. AUD/USD finally bounced higher after having had a tough week on growth fears. Investors this week will be looking for any signs of what the RBA might do with interest rates next week, despite a fairly thin weekly economic calendar," he explains.

Charles Schwab's OptionsXpress analyst Ben Le Brun adds that this week is a "consolidation period" with a lack of company news and economic data expected.

Mr Le Brun points out the retail equities JB Hi Fi, Kathmandu, Super Retail with Premier Investments and Oroton will report their earnings, which could further emphasize the slow pick-up in this sector.

"Only Super Retail and Oroton are amongst a couple of others performing ok in the challenging environment. Will the poison chalice strike again? Time will soon tell," Mr Le Brun adds.

There would be some focus on Qantas likely announcing a deal with China Eastern to start Jetstar Hong Kong in 2013.

"Focus this week will likely be on the reinforcement of Europe's firewalls after Germany finally eased its stance on the firewall issue. We are also likely to see some quarter-end rebalancing and window dressing possibly driving risk assets higher, although volume is expected to continue to be light," says Mr. Shamu if IG Markets.

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