Australian Stock Market Report – Morning 3/3/14

US 5.50am MORNING REPORT
(am AEDT)

In US economic data, preliminary figures showed the US economy grew at a 2.4% annual rate in the December quarter, just short of forecasts but down from the 3.2% ´´flash´´ reading. Consumer sentiment rose from 81.2 to 81.6 in February. Pending home sales rose by 0.1% in January. And the Chicago purchasing managers index rose from 59.6 to 59.8 in February.

In China, the ´´official´´ purchasing managers index eased from 50.5 to 50.2, but was above the 50.1 consensus forecast.

European shares generally rose on Friday with worries over the political situation in the Ukraine capping sentiment. The FTSEurofirst 300 index rose by 0.2% with the UK FTSE down by less than 0.1% while the German Dax gained 1.1%. Mining shares were mixed in London trade with BHP Billiton up by 0.1% while Rio Tinto lost 0.8%.

US blue-chip shares rose on Friday with the S&P 500 at fresh record highs. But worries about the political situation in the Ukraine capped gains. At the close of trade, the US Dow Jones was up by 49 points or 0.3% with the S&P 500 up by 0.3% while the Nasdaq eased by almost 11 points or 0.3%. For the month, the Dow rose 4%, the S&P 500 gained 4.3% and the Nasdaq rose 5%. For the week, the Dow was up 1.4%, the S&P 500 was up 1.3% and the Nasdaq rose 1%.

US treasury prices were mixed on Friday as investors weighed up latest economic data and tensions between Russia and western nations over the Ukraine. US 2 year yields fell 1 point to 0.325% while US 10 year yields rose by 1 point to 2.65%. Over the week US 2 year yields were flat and US 10 year yields fell by 9 points.

Major currencies were mixed against the greenback over the European and US sessions. The Euro lifted from lows near US$1.3695 to US$1.3825 and was near US$1.3800 in afternoon US trade. The Aussie dollar fell from highs near US89.65c to lows near US89.10c, and was around US89.25c in afternoon US trade. And the Japanese yen held between 101.57 yen per US dollar to JPY102.25 and was trading near JPY101.79 in afternoon US trade. This morning the Euro is at US$1.3780, Aussie at US89.05c and Japanese yen at JPY101.50 per USD.

World oil prices rose modestly on Friday. Brent crude rose by US11c to US$109.07 a barrel while US Nymex crude rose by US19c to US$102.59 a barrel. Over the week Brent fell by US78c but Nymex rose by US39c.

Base metal prices were mixed on the London Metal Exchange on Friday. Nickel rose 1.9% and zinc rose 1.3% but other metals fell up to 0.8%. Over the week, zinc, tin and nickel rose up to 3.2% while other metals fell. The Comex gold futures price fell on end-month profit-taking on Friday, down by US$10.20 or 0.8% to US$1,321.60 per ounce. Gold rose 6.5% in February. Iron ore rose by US10c on Friday to US$118.10 a tonne but fell US$4.30 on the week.

Ahead: In Australia, the home value index, Performance of Manufacturing index, inflation gauge, job ads and ABS Business indicators are released. In the US, personal income, auto sales, construction spending and the ISM manufacturing index are released.

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