Australian Stock Market Report – Morning 10/30/13

MORNING REPORT
(7.05am AEDT)

In US economic news, retail sales fell 0.1pct in September, but excluding autos, sales rose 0.4pct, in line with forecasts. Producer prices fell by 0.1pct in September, but excluding food and energy, prices rose 0.1pct, in line with forecasts. Consumer confidence fell from 80.2 to 71.2 in October. And the Case Shiller home price index rose 0.9pct in August to stand 12.8pct higher than a year ago.

European shares rose on Tuesday, buoyed in part by positive earnings results in the oil sector. Shares in BP rose 5.6pct on news that it is offering to sell more non-core assets. The FTSEurofirst 300 index rose by 0.4pct, the German Dax lifted 0.4pct and the UK FTSE rose by 0.7pct. Mining shares edged higher in London trade with BHP Billiton up 0.2pct while Rio Tinto shares rose by less than 0.1pct.

US sharemarkets rose on Tuesday after latest economic data suggested that the Federal Reserve will delay a decision to wind back economic stimulus. But there were mixed results from companies on latest news. Shares in IBM rose by 2.7pct after announcing a stock buyback while shares in Apple eased 2.5pct on its earnings result. The Dow Jones rose by 111 points or 0.7pct with the S&P 500 up by 0.6pct while the Nasdaq rose by 12.2pts or 0.3pct.

US longer-term treasury yields rose modestly on Tuesday (yields lower), reversing early losses, as traders positioned ahead of the Federal Reserve decision. US Treasury sold $35 billion in five-year notes on Tuesday and will sell $29 billion in seven-year notes on Wednesday. US 2yr yields were steady near 0.317pct and US 10yr yields were down 2pts to 2.503pct.

The US dollar again lifted modestly against major currencies in European and US trade on Tuesday. The Euro eased from highs near US$1.3815 to around US$1.3735 before ending US trade around US$1.3740. The Aussie dollar eased from near US95.20c to around US94.70c, ending US trade near its lows. And the Japanese yen eased from near 97.48 yen per US dollar to JPY98.26, ending US trade near JPY98.17.

World oil prices fell on Tuesday. Traders speculated that Libyan production could resume after production fell over the weekend following new protests at its oil fields and ports. Reuters reports: ´´Libya´s prime minister said exports from the eastern port of Hariga with a capacity of 110,000 barrels per day would resume after one week´´. US Brent crude fell by US60c to US$109.01 a barrel. Nymex fell by US48c or 0.5pct to US$98.20 a barrel.

Base metal prices were mixed on the London Metals Exchange on Tuesday. Aluminium fell most, down by 0.6pct, but copper rose most, up by 0.3pct. Gold fell as the US dollar rose with the Comex December futures gold price down by US$6.70 or 0.5pct to US$1,345.50 per ounce. The iron ore price fell by US50c to US$131.30 a tonne on Tuesday.

Ahead: In Australia, data on new home sales is released. In the US, the Federal Reserve hands down its monetary policy decision. Data on consumer prices is released with the ADP employment survey.

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