Australian Stock Market Report – Morning June 30, 2014

Pedestrians walk past a David Jones department store in central Melbourne in this September 24, 2009 file photo. South African retailer Woolworths Holdings Ltd is set to buy Australia's second-largest department store David Jones for $2 billion, trumping an offer from Australian rival Myer Holdings Ltd with a hefty premium. Reuters/Mick Tsikas/Files

Morning Report
6:05 AEST)

In US economic data, the University of Michigan final reading on consumer sentiment rose from 81.9 to 82.5 in June, mildly above expectations. Interestingly 1-year inflation expectations index fell from 3.3% to 3.1% - the lowest reading in six months.

European shares ended the week slightly higher on Friday. Airbus shares gained 1.6% after reports said the European plane maker was set to close an exclusive dealwith Rolls-Royce (up 2.2%) for A330 engines. The FTSEurofirst 300 index rose 0.1%, the German Dax also gained 0.1% while the UK FTSE rose 0.3%. Australia´s major miners finished mixed in London trade with shares in BHP Billiton higher by 0.7% while Rio Tinto fell by 0.4%. Over the week, FTSEurofirst 300 index lost 1.7%.

US sharemarkets recorded modest gains on Friday, led by technology stocks. Apple gained 1.2% lifting the S&P technology sector by 0.6%. Heading into the end of financial year volumes surged with 8.9 billion shares trading hands across US exchanges, well ahead of the 5.6 billion average. DuPont lost 3.3% a day after cutting its operating profit forecast for the second quarter. Nike shares rose 1.1% after reporting strong sales. The Dow Jones rose by 6 points with the S&P 500 index down by 0.2% and the Nasdaq rose by 19 points or 0.4%. Over the week, the Dow Jones fell by 0.6%, the S&P 500 lost 0.1% and the Nasdaq gained 0.7%.

US treasury prices were mixed on Friday on light volumes as traders locked in profits and squared positions ahead of the end of the financial year. US 2 year yields fell by 1 point to 0.46% while US 10 year yields were flat at 2.54%. Over the week US 2 year yields were flat, while US 10 year yields fell by 9 points.

Major currencies were mixed against the US dollar on Friday. The Euro lifted from lows near U$1.3610 to highs near US$1.3650, closing US trade near its highs. The Aussie dollar held in a tight range between US94.05c and US94.35c and ended US trade near US94.20c. And the Japanese yen traded in an even tighter range between 101.30 yen per US dollar to JPY101.40, ending US trade near JPY101.35.

World oil prices were little changed on Friday in a choppy trading, with traders still focusing on Iraq. Brent crude rose by US9c or 0.1% to US$113.30 a barrel. While the US Nymex price closed lower by US10c or 0.1% to US$105.74 a barrel. Over the week Brent fell by US$1.51 or 1.3% while Nymex fell by US$1.52 or 1.4%.

Base metal prices were mixed on the London Metal Exchange on Friday. Nickel lifted by 0.7%, while zinc gained 0.1% but other metals lost up to 0.7% with aluminium leading the declines. The Comex gold futures quote rose by US$3 an ounce or 0.2% to US$1,320 per ounce. Over the week gold rose by 0.3%. Iron ore fell by just US0.40 a tonne or 0.4% to US$94.90 a tonne. Over the week, iron ore rose by US$2.80 or 3%.

Ahead: In Australia, private sector credit, the TD inflation gauge and HIA new home sales figures are released. In the US, pending home sales, construction spending and the ISM manufacturing index are released.

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