Australian Stock Market Report 05/11/2011
US import prices rose by 2.2pct in April, driven by a 7.2pct lift in petroleum prices. Export prices rose by 1.1pct. Economists had tipped a 1.8pct rise in import prices and 0.9pct lift in export prices. And US wholesale inventories rose by 1.1pct in March with sales up 2.9pct. The stocks to sales ratio fell to a near 3-year low.
[Sign up here to get this report delivered to your inbox daily]
European shares rebounded on Tuesday with banks and miners leading the way. Investors tip an orderly restructuring of Greek debt, sparing pain for the banking sector. And miners rose in response to solid Chinese import data. The FTSEurofirst index rose by 0.8pct with the German Dax up 1.2pct and the UK FTSE up 1.3pct.
US sharemarkets rose for a third day on Tuesday. Utilities and other defensive sectors led the way, although gains were spread across the board. However shares in Microsoft dipped 0.6pct after revealing plans to buy internet phone giant Skype for $8.5 billion. The CBOE volatility index - also known as the ´´fear gauge´´ - fell another 7.3pct. The Dow Jones index rose by 75pts or 0.6pct with the S&P 500 higher by 0.8pct and the Nasdaq was up by 28pts or 1.0pct.
US treasury prices eased (yields higher) as investors shifted to growth-focussed investments like equities, commodities and commodity currencies. US 2yr yields rose by 3pts to 0.585pct and US 10yr yields rose by 5pts to 3.215pct.
The US dollar lost ground against the Euro and commodity currencies on Tuesday as investors showed a liking for riskier, or growth-focussed, investments. The Euro rose from lows near US$1.4270 to US$1.4410, ending US trade near its highs. The Aussie dollar rallied from lows near US107.35c to around US108.45c, and was also near its highs in late US trade. But the Japanese yen eased from around 80.45 yen per US dollar to JPY80.85, closing US trade near its weakest levels.
US and European crude oil prices rose again on Tuesday. Supporting prices was strong Chinese import data for April and supply concerns emanating from the flooding of the Mississippi River. The flooding threatens to disrupt refineries in Louisiana, including the second largest refinery in the US. The Nymex crude oil contract rose by US$1.33 or 1.3pct to US$103.88 a barrel. London Brent crude rose by US$1.73 to US$117.63 a barrel. In after-hours trade, US crude eased to US$103.30 after the release of American Petroleum Institute inventory data.
Base metals
Base metal prices were mostly higher on the London Metal Exchange on Tuesday with the exception of tin, down 0.7pct. Other metals rose up to 2pct with nickel doing best. And the gold price rose for a second day in line with other commodities with Comex gold futures up by US$13.70 an ounce or 0.9pct to US$1,516.90.
Ahead: In Australia, David Jones is releasing sales data. CBA releases its third quarter trading update. In China, monthly economic data is issued. In the US, trade data is released.
More from IBT Markets:
Newsletter: To receive Global Markets update, sign up here