Australian Stock Market Report 06/14/2011
Ratings agency Standard and Poor´s has slashed the credit rating of Greece by three notches from B to CCC and retained a negative outlook on the rating. S&P has also warned that it would view a debt restructuring as a default.
European shares recorded modest gains on Monday. Telecom stocks were buoyed by a broker upgrade on Vodafone. Shares in Vodafone rose by 0.9pct. However mining stocks were flat with shares in both Rio Tinto and BHP Billiton up by less than 0.1pct in London trade. The FTSEurofirst index rose by 0.2pct, the German Dax also rose 0.2pct, and the UK FTSE edged 0.1pct higher.
[Sign up to get reports daily in your inbox]
US sharemarkets stabilised on Monday after investors concluded that recent selling was overdone. The Dow Jones edged 1 point higher or less than 0.1pct with the S&P 500 index up 0.1pct but the Nasdaq lost 4pts or 0.2pct. Between 1pm and 2pm New York time the Dow rallied 85pts after investors concluded that the selling was overdone. Earlier on Friday the Dow Jones ended lower by 172pts or 1.4pct to close out a sixth week of declines. The Dow lost 1.6pct last week.
US treasury prices were mixed on Monday but finished off their best levels as stocks rebounded from lows. US 2yr yields fell by 1pt to 0.396pct and US 10yr yields rose by 1pt to 2.98pct. Last week US 2yr yields fell by 3pts and US 10yr yields fell by 2pts.
The Euro and commodity currencies lifted sharply against the greenback around 1pm New York time as US stocks rallied. The Euro lifted from US$1.4345 to near US$1.4430 to end US trade near US$1.4410. The Euro had been as low as US$1.4325 in morning London trade. The Aussie dollar rose from lows near US105.35c to near US106.35c before ending US trade near US106.00c. And the Japanese yen strengthened from 80.45 yen per US dollar to JPY80.10, ending US trade near JPY80.20.
US crude oil prices fell sharply over Thursday and Friday. Saudi Arabia is offering more oil to Asian buyers and is planning to increase output in July. In addition another ratings downgrade on Greece has raised concerns about global economic growth. The Nymex crude oil contract fell by US$1.99 a barrel on Monday to US$97.30 a barrel after falling by US$2.64 on Friday. And London Brent crude rose by US32c on Monday after easing US79c on Friday and stands at US$119.10 a barrel.
Base metal prices fell between 0.3-2.5pct on the London Metal Exchange on Monday in line with other commodities. Nickel fell 2.5pct and tin lost 2.2pct. On Friday base metals were also down, dropping between 1.3-2.4pct with lead faring the worst. And the gold price rose was also lower on Monday with Comex gold futures down by US$13.60 an ounce to US$1,515.60. Gold fell US$13.50 an ounce on Friday.
Ahead: In Australia, the NAB business survey, credit card data and lending finance figures are scheduled. In the US, data on producer prices and retail sales are released. Monthly Chinese economic data is released today.
More from IBT Markets:
Subscribe to get this delivered to your inbox daily
Follow us on Facebook.
Follow us on Twitter.