US factory orders lifted by 3.0pct in March following the 0.7pct gain in February. The result exceeded expectations of a 1.9pct lift in orders. Car makers reported healthy sales in April with car and truck sales by General Motors up 26pct on a year ago and Honda reporting the second best monthly sales on record. And the Johnson Redbook Retail Sales index in the latest week was 5.5pct higher than a year ago with total April sales up 5.1pct.

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The Reserve Bank of India has lifted rates by more than expected, hiking policy rates by 50 basis points. The repo rate rises to 7.25pct with the reverse repo up to 6.25pct.

European shares fell for the first time in nine days. Gold and oil prices fell, weighing on resources stocks. In London trade shares in BHP Billiton lost 1.5pct with Rio Tinto down 1.6pct. The FTSEurofirst index fell by 0.5pct, but while the German Dax eased by 0.4pct, the UK FTSE rose by 0.2pct.

US sharemarkets closed mixed on Tuesday with stronger economic news balanced by negative corporate news. Shares in retailer Sears fell by 9.7pct after the company said it will post a loss for the first quarter. The Dow Jones index was flat (up just 0.15 points) while the S&P 500 fell by 0.3pct and the Nasdaq eased by 22.5pts or 0.8pct.

US treasuries rose for a third straight day as equity markets eased and investors focussed on European debt issues. US 2yr yields fell by 1pt to 0.605pct and US 10yr yields fell by 3pts to 3.25pct.

Major currencies were little changed against the greenback in US trade. The Euro traded from lows near US$1.4775 to US$1.4885, before ending US trade near US$1.4825. The Aussie dollar eased from highs near US109.30c to around US108.40c before ending US trade near US108.45c. And the Japanese yen lifted from near 81.60 yen per US dollar to JPY81.05, before closing US trade at JPY80.90.

US and European crude oil prices fell on Tuesday. A larger-than-expected rate hike in India raised concerns about oil demand and this contributed to technical selling. The Nymex crude oil contract fell by US$2.47 or 2.2pct to US$111.05 a barrel. London Brent crude fell by US$2.67 to US$122.45 a barrel.

Base metal prices were generally higher on the London Metal Exchange on Tuesday, the exception being zinc, down 0.3pct. Other metals rose 0.3-1.7pct with nickel doing best. But gold eased in line with the oil price in response to a rate hike in India. The Comex gold futures price fell by US$16.70 an ounce or 1.1pct to US$1,540.40.

Ahead: In Australia, the Performance of Services index is released together with new home sales for March and car sales. Westpac releases its half profit result. In the US, the ISM services index, ADP employment report and Challenger job layoff series are released.

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