Australian Stock Market Report – Morning 3/27/14

US MORNING REPORT
(7am AEDT)

In US economic data, durable goods rose 2.2% in February, following two months of declines. However orders for non-defence capital goods excluding aircraft (a proxy for business spending plans) unexpectedly fell 1.3% after rising 0.8% in January. The Markit ´´flash´´ services sector PMI rose from 53.3 to 55.5 in March.

European shares rose on Wednesday, as positive US economic data helped the market extend the recovery rally. Spanish stocks outperformed the broader market, after the Bank of Spain said the country´s economic recovery was on track. Financial stocks led the gains with lenders Banco Santander and BBVA both lifting by 1.2%. The FTSEurofirst 300 index rose by 0.7% with the UK FTSE flat, while the German Dax gained 1.2%. Mining shares were mixed in London trade with shares in BHP Billiton down by 0.7% while Rio Tinto gained 0.6%.

US sharemarkets fell in late trade on Wednesday led by losses in material and technology stocks. Facebook shares fell 5%, while King Digital Entertainment, maker of the ´´Candy Crush Saga´´ game fell nearly 20% on its trading debut, after initially being floated for about $6 billion. The Nasdaq biotech index fell by 1.9%. The sell-off accelerated after President Obama said the US and EU agreed to work together to prepare tougher economic sanctions on Russia. The Dow Jones index closed lower by 99 points or 0.6% with the S&P 500 down 0.7% and the Nasdaq lost 61 points or 1.4%.

US treasury prices were mixed on Wednesday after an auction of $35 billion in five-year notes was met with strong demand. Indirect bidders purchased 50.9% of the sale while dealers only took 25.9% of the notes - well below the average of 47%. US 2 year yields rose 1 point to 0.45% while US 10 year yields fell by 5 points to 2.70%.

Major currencies were mixed against the greenback over the European and US sessions on Wednesday. The Euro fell from highs near US$1.3820 to US$1.3780 and ended US trade around US$1.3795. The Aussie dollar rose from lows near US91.85c to near US92.45c and was around US92.30c at the US close. And the Japanese yen strengthened from 102.45 yen per US dollar to JPY101.95 and was near JPY102.05 at the US close.

World oil prices were mixed in a choppy trading on Wednesday. US crude edged higher after the US EIA reported the eighth straight weekly drawdown in oil stocks at the delivery point in Cushing, Oklahoma. Brent crude fell by just US1c or to US$106.98 a barrel while US Nymex crude rose by US$1.07 or 1.1% to US$100.26 a barrel.

Base metal prices fell on the London Metal Exchange on Wednesday, with metals down between 1.0-1.8%. The gold futures price fell to a near six-week low on Wednesday. The Comex futures price fell by US$8 an ounce to US$1,303.40 per ounce. Iron ore rose by 10c to US$111.90 a tonne on Wednesday.

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