Australian Stock Market Report – Morning 11/25/13

MORNING REPORT
(5.15am AEDT)

In US economic news, the Kansas City Federal Reserve manufacturing index eased from 14 to 11 in November but the composite index rose from 6 to 7.

Nuclear deal: Iran and six Western nations secured a deal on Sunday in which Iran agrees to halt enrichment above 5pct and neutralize its stockpile of near-20pct uranium in exchange for relief from sanctions, valued up to US$7 billion.

European shares rose slightly on Friday with no major corporate or economic events to drive trade. The FTSEurofirst 300 index rose by 0.1pct and the German Dax gained 0.3pct but the UK FTSE lost 0.1pct. In UK trade, shares in BHP Billiton fell by 1.8pct while Rio Tinto lost 1.6pct.

US sharemarkets rose again on Friday. The Dow Jones closed at record highs above 16,000 and the S&P 500 closed at record highs above 1,800 points for the first time. At the close of trade, the Dow Jones was up by 54 points or 0.3pct, with the S&P 500 up by 0.5pct while the Nasdaq lifted 22pts or 0.6pct. Both the Dow Jones and S&P 500 rose for the seventh straight week, lifting 0.6pct and 0.4pct respectively while the Nasdaq rose by 0.1pct.

US treasuries rose on Friday (yields lower) as bargain hunters continued to be active after prices fell earlier in the week on speculation that the US Federal Reserve could wind back monetary stimulus. US 2yr yields fell by less than 1pt to 0.28pct while US 10yr yields were down 4pts to 2.74pct. Over the week US 2yr yields rose by 1pt and US 10yr yields rose by 8pts.

The US dollar was again mixed against major currencies in European and US trade on Friday. The Euro rose from lows near US$1.3465 to close New York trade near its highs of US$1.3560. The Aussie dollar fell from highs near US92.10c to US91.45c, and closed US trade at US91.65c. And the Japanese yen eased from near 100.94 yen per US dollar to JPY101.35, and ended US trade near JPY101.25.

World oil prices were mixed on Friday. Investors focused on the nuclear talks between Iran and the West. Major refinery, Sinopec, expects Chinese oil demand to rise by 3.8pct in 2014 and 2015. Brent crude rose by US97c or 0.9pct to US$110.08 a barrel while US Nymex crude eased by US60c or 0.6pct to US$94.84 a barrel. Over the week Brent rose by 2.4pct while Nymex rose by 1.1pct.

Base metal prices rose up to 1.1pct on the London Metal Exchange on Friday but aluminium lost 0.1pct and tin lost 0.4pct. Over the week metals were mixed, with zinc, copper and lead rising up to 1.4pct but other metals fell up to 1.9pct. The gold futures price lifted off four-month lows on Friday with the Comex December futures gold price up by US50c or less than 0.1pct to US$1,244.60 per ounce. Data showed the German Bundesbank sold 3.421 tonnes of gold for federal coin minting in October. Over the week gold lost $43.30 or 3.4pct. The iron ore price rose by US20c to US$136.50 a tonne but fell 30c over the week.

Ahead: In Australia, no major economic data is scheduled. In the US, pending home sales data, the Markit flash services gauge and the Dallas Federal Reserve manufacturing index are released.

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