Australian Stock Market Report – Morning December 15, 2014

Shoppers look through a bin full of pajamas inside a Target store on the shopping day dubbed "Black Friday" in Torrington, Connecticut November 25, 2011. The U.S. holiday shopping season was in full-swing on Thursday, with retailers hoping consu — Shoppers look through a bin full of pajamas inside a Target store on the shopping day dubbed "Black Friday" in Torrington, Connecticut November 25, 2011. Reuters/Jessica Rinaldi

* In US economic data, consumer sentiment rose from 88.8 to 93.8 in December - a near eight-year high. The survey's barometer of current economic conditions rose from 102.7 to 105.7 - highest level since February 2007. The survey's one-year inflation expectation rose from 2.8% to 2.9%.

* European shares fell on Friday and posted their biggest loss since mid-2011. The ongoing slide in the oil price once again hurt energy producers. The STOXX oil & gas index fell 3.6% on Friday. Shares in companies exposed to Russia also fell sharply after the Russian Rouble fell to a new low against the US dollar. Greek stock markets continued to slide ahead of the early election. The ATG Greek stock index has lost more than 20% in a week. The FTSEurofirst 300 index fell by 2.6%, the German Dax fell by 2.7%, while the UK FTSE fell by 2.5%. For the week the FTSE 300 lost 5.9%. In London trade shares in BHP Billiton lost 2% while Rio Tinto gave back 2.4%.

* US sharemarkets slumped on Friday as concerns about global growth hurt sentiment. The fall in oil prices resulted in the S&P energy sector falling 2.2%. Mixed data out of China added to the weakness, with the S&P material sector losing 2.9%. The CBOE Volatility Index rose by 5%. At the close of trade, the Dow Jones fell by 316 points or 1.8%. The S&P 500 index was down by 1.6% and the Nasdaq lost 55 points or 1.2%. For the week, the Dow lost 3.7% and the S&P fell by 3.5% while the Nasdaq lost 2.7%

* US treasuries rose on Friday (yields lower) as the slide in the oil price hurt equities increased demand for safe-haven US debt. Concerns about disinflation added to the slide in yields. US 2 year yields fell by 6pts to 0.544% while US 10 year yields fell by 9pts to 2.084%.Over the week US 2 year yields fell by almost 9 points while US 10 year yields fell by 17 points.

* Major currencies were mixed against the greenback in European and US trade on Friday. The Euro lifted from lows near US$1.2380 to highs near US$1.2480, and was around US$1.2470 in late US trade. The Aussie dollar fell from highs near US82.95c to around US82.25c and closed US trade near US82.50c. And the Japanese yen eased from 118.10 yen per US dollar to JPY119.05 and was near JPY118.70 in late US trade.

* World oil prices slumped on Friday to fresh 5-year lows, after the International Energy Agency slashed its global demand outlook for 2015 by 230,000 barrels to 900,000 barrels. Brent crude fell by

US$1.83 or 2.9% to US$61.85 a barrel while the US Nymex crude price fell by US$2.14 or 3.6% to US$57.81 a barrel.

* Base metal prices were mostly higher on the London Metal Exchange on Friday with the exception of aluminium (down 0.8%) and zinc (down 0.1%). Gold fell with Comex gold futures down by US$3.10 an ounce or 0.3% to US$1,222.20 per ounce. Iron ore fell by US10c to US$68.70 a tonne on Thursday.

Ahead: In Australia, data on motor vehicle sales are released alongside the Mid-year Fiscal Outlook. In the US, industrial production, the Empire manufacturing gauge, the NAHB housing market index are released.

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