Australian Stock Market Leads - 04/19/2012

Analysts are looking forward to Australia's Prime Minister Julia Gillard's speech harping on the Reserve Bank to cut rates to prop up the domestic economy. This may lower down the pessimistic leads seen reflecting on Thursday's Australian markets beginning with the IMF's disclosure that the European debt burden will still weigh down on global markets.

According to IG Markets strategist Stan Shamu, "Prime Minister Julia Gillard is reportedly preparing to make a speech that will ramp up pressure on the RBA to cut rates. However, this is unlikely to result in a shift in the RBA's stance, as it is supposed to be an independent body."

Mr. Shamu reports the commodity/risk currencies struggled as risk appetite waned. Oil dropped around 1.5% following a jump in inventories, while gold and copper were around half a percent weaker.

"However, we expect to see some follow-through buying in the local resource names after recent production reports and broker upgrades. BHP's ADR is pointing to a 0.2% gain at the open to $35.18. We could see the energy sector underperform after oil struggled in US trade. Telstra will be one to watch after it released an investor update this morning confirming FY12 guidance and dividend," he adds.

Local markets are up during the first hour, but is seen skidding 0.1% at 4346 by mid-day.

On the local economic front, we have NAB quarterly business confidence data due out today. However, this is not a big market mover and focus is likely to remain on the big miners' production reports, with Fortescue Metals coming to the fore today, Mr Shamu notes.

Elsewhere in the Asia-Pacific region, Japan will report on its trade balance figures and comments from BoJ Governor Shirakawa due out, which will have an impact in regional trading.

MARKETS OVERNIGHT

In US trade, markets retreated from the previous day's gains, as Spain's problems resurfaced following a spike in bad loans. There was some caution ahead of today's Spanish bond auctions, particularly in the wake of data showing that non-performing loans as a proportion of total lending in Spain jumped in February. Investors also reacted to some disappointing earnings reports from Intel and IBM.

Among the major averages, the Dow Jones Industrial Average was down 0.6% at 13033. The S&P was 0.4% lower at 1385, while the NASDAQ shed 0.4% to finish at 3031.

IG MARKETS CHART, 19 APRIL 2012

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