Australian Stock Market Report – Morning 11/19/13

MORNING MARKET UPDATE
(8.000am AEDT)

In US economic news, the NAHB housing market index held steady at 54 in November, down a little off its recent September quarter peak, but clearly still indicative of a increasingly strong housing market. Net long-term TIC flows returned to positive inflow in September of $25.49b. There was a net inflow of $27.8b. into treasury securities.

European shares rose on Monday with German utility companies providing the bulk of the gains on expectations for a favourable court ruling on Germany´s nuclear fuel tax. The European utilities index rose 1pct. Financial services companies rallied hard, led by Aberdeen Asset Management which jumped 13.4pct as investors cheered its deal to buy Lloyds funds management arm Scottish Widows. The FTSEurofirst 300 index rose by 0.5pct, the UK FTSE lifted by 0.5pct and the German Dax gained 0.6pct to fresh record highs. In UK trade, shares in BHP Billiton rose by 0.4pct while Rio Tinto gained 0.3pct.

US sharemarkets eased were mixed on Monday, after initially hitting fresh record highs. Investors kept their focus on economic stimulus prospects from the Federal Reserve. William Dudley, the president of the Fed Bank of New York said he was becoming ´´more hopeful´´ about the US economic recovery. Boeing (up 2.1pct) was among the Dow´s top gainers after striking new plane deals on the first day of the Dubai Air show. At the close of trade, the Dow Jones was up by 16 points or 0.1pct with the S&P 500 down by 0.4pct and the Nasdaq was lower by 37pts or 0.9pct.

US treasuries rose on Monday (yields lower), supported by the prospect of ongoing stimulus but gains were limited by investors preference for riskier assets. US 2yr yields fell by 2pts to 0.28pct and US 10yr yields fell by 5pts to 2.66pct.

The US dollar eased against the Euro in European and US trade on Monday after China announced its most sweeping economic and social reforms in three decades, lifting investor appetite. The Euro rose from early lows near US$1.3485 to around US$1.3540, and holding near US$1.3505 in afternoon US trade. The Aussie dollar eased from near US94.20c to US93.65c, holding near US93.75c in late trade. And the Japanese yen eased from near 99.80 yen per US dollar to JPY100.20, before ending US trade near JPY99.90.

World oil prices fell slightly on Monday. Continued Libyan supply outages were balanced by news that Saudi Arabia´s oil exports surged to the highest levels in eight years. The Brent crude fell by US3c to US$108.47 a barrel while US Nymex crude fell by US81c to US$93.03 a barrel.

Base metal prices were weaker on the London Metal Exchange on Monday with nickel the biggest decliner, losing 1.7pct. Gold fell for the first time in three sessions on Monday with the Comex December futures gold price down by US$15.10 or 1.2pct to US$1,272.30 per ounce. The iron ore price rose by US20c on Monday to US$137.00 a tonne.

Ahead: In Australia, the Reserve Bank Board minutes are released. In the US, no major economic data is scheduled for release.

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