Australian Stock Market Report - Morning

US new home sales rose by 5.5pct to a seasonally adjusted 290,000 unit annual pace. At the November sales pace the supply of new homes fell from 8.8pct to 8.2pct months worth in October. There were 197,000 new homes available for sale in November - the lowest reading in 42 year. In annual terms sales were still down 21.2pct on a year ago.

The final reading on the University of Michigan consumer sentiment reading rose from 71.6 to 74.5 in November. The report suggested ´´that the overall tenor of news about recent economic developments was on balance more favourable than any time during the last six years´´.

US jobless claims eased modestly to 420,000 in the past week. US durable goods orders fell by 1.3pct in November, dragged down by a slide in aircraft orders and motor vehicles. Excluding transportation durable goods increased by 2.4pct.

European shares eased on Thursday in light volumes. Miners were amongst the laggards as copper fell from record highs. The FTSEurofirst index fell by 0.1pct, with the UK FTSE up 0.2pct while the German Dax was lower by 0.1pct.

US sharemarkets recorded modest losses on Thursday. Banking shares fell due to profit taking after the recent gains. The KBW banking index fell by 0.9pct. At the close of trade, the Dow Jones was higher by 14pts up 0.1pct with the S&P 500 down 0.2pct and the Nasdaq weaker by 6pts or 0.2pct.

US treasuries fell (yields higher) on Thursday as traders cut prices ahead of the $99 billion in new supply that is expected to be auctioned next week. US 2yr yields rose by 1pt to 0.65pct while US 10yr yields rose 4pts to 3.40pct.

The Euro rallied from three week lows against the US dollar. However gains were modest as speculation mounted of further ratings downgrades across the Euro zone. The Euro hit early highs near US$1.3145 before falling to US$1.3055, ending US trade near US$1.3115. The Aussie dollar rallied from lows near US100.10c to US100.50c, and was near US100.40c in late US trade. And the Japanese yen traded between 83.55 yen per US dollar and JPY82.85, and was around JPY82.95 in late US trade.

US crude oil prices rose for a fifth straight session, and held at two year highs on Thursday. The cold weather in the US and Europe supported the demand for oil based products. The Nymex crude oil contract rose by US$1.03 or 1.1pct to US$91.51 a barrel.

Base metal prices were mostly weaker on the London Metal Exchange. Nickel led the declines, falling by 1.9pct, while the copper price fell from near record highs down by 0.6pct. The gold price followed base metals lower. Comex gold futures eased by US$6.90 an ounce to US$1,380.50.