Australian Stock Market Report - Morning 14/02/2011
Egypt's President Mubarak resigned on Friday, handing power to the army, with the news sending US stocks higher, but oil prices and the US dollar lower.
US consumer sentiment rose from 74.2 to 75.1 in February, but still below forecasts for a result near 75.5. And the US trade deficit widened from US$38.3bn to US$40.6bn in January, just above forecasts of US$40.4bn.
European shares rose on Friday in response to the news from Egypt and higher corporate earnings from Swatch and Alcatel. Shares in Nokia fell 14pct after striking up a partnership deal with Microsoft. The FTSEurofirst index rose by 0.4pct, with the UK FTSE up 0.7pct and German Dax higher by 0.4pct.
US sharemarkets rose on news that Egypt´s President Mubarak had resigned. At the close of trade, the Dow Jones index was up 44pts or 0.4pct with the S&P 500 up 0.6pct and the Nasdaq hit 3-year highs, up 19pts or 0.7pct. Over the week the Dow Jones rose by 1.5pct with the S&P up 1.4pct and Nasdaq lifted by 1.5pct.
US treasuries were mixed on Friday as some investors weighed up latest economic and geopolitical news while others embraced long bonds with yields at 10-mth highs. US 2yr yields were largely steady at 0.84pct but US 10yr yields eased 6pts to 3.63pct. Over the week US 2yr yields rose by 9pts but US 10yr yields fell less than 1pt.
The Euro and commodity currencies rallied in afternoon US trade following news that Egypt´s President Mubarak has resigned. The Euro eased from US$1.3580 to US$1.3500 before reversing course to end US trade near US$1.3545. The Aussie dollar rose from US99.55c to US100.30c, weakened to US99.90c, before reversing to US100.20c at the US close. And the Japanese yen lifted from 83.65 yen per US dollar to around JPY83.30, before weakening to JPY83.45 in late US trade.
US crude oil prices fell on news that Egypt´s President Mubarak had resigned. The Nymex crude oil contract fell by US$1.15 (1.3pct) to US$85.58 a barrel. But the expiring London Brent crude rose by US56c to US$101.43 a barrel. Over the week Nymex crude fell by 3.9pct while Brent rose by 1.6pct.
Base metal prices were higher on the London Metal Exchange on Friday, the exception being aluminium, down 1.7pct. Other metals rose between 0.3-1.9pct with lead doing best. Over the week metals eased by 0.3-2.7pct but after soaring 5-7pct in the previous week. But the gold price eased on Friday as investors trimmed demand for safe-haven assets. The Comex gold futures price fell by US$2.10 an ounce to US$1,360.40. Gold rose by US$11.40 an ounce (0.8pct) over the week.
Ahead: In Australia, housing finance and credit card data are released. Leighton Holdings and Bendigo & Adelaide Bank release earnings. Chinese trade data is released. In the US, no major economic data is scheduled.
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