Australian Stock Market Report – Morning October 21, 2013

A placard reading "You speculate with our lives" stands next to huge euro logo in front of the headquarters of the European Central Bank (ECB) before the bank's monthly news conference in Frankfurt August 7, 2014. The European Central Bank left interest rates unchanged on Thursday, holding off fresh policy action as it prepares to launch fresh funding for banks next month that it hopes will lift inflation from rock-bottom levels. REUTERS/Ralph Orlowski

* European shares fell on Monday, trimming gains made in the previous session. German software maker SAP fell 5.8% after cutting its full-year profit outlook. The news hit the tech sector with the STOXX 600 Technology sector falling 2.4%. German sportswear firm Adidas rose 3.6% after the Wall Street Journal reported that an investor group was planning a bid to buy Adidas's Reebok unit. The FTSEurofirst 300 index lost 0.5%. The UK FTSE fell 0.7% and the German Dax lost 1.5%. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 1.4% while Rio Tinto lost 0.6%.

* US sharemarkets were recovered after early losses on Monday. The S&P 500 and Nasdaq advanced, but disappointing results from IBM kept the Dow under pressure. IBM slumped by 7.2% after third quarter earnings fell well short of expectations. IBM is looking to overhaul its business units. According to Thomson Reuters data 87 companies on the S&P 500 have reported quarterly earnings with 63.2% beating analyst expectations (in line with the last two decades). The Dow Jones initially fell by 120 points before recovering to close up by 19 points or 0.1 per cent with the S&P 500 index up by 0.9% while the Nasdaq rose by 57 points or 1.4%.

* US treasury prices rose on Monday (yields lower) as weaker European equities and speculation that the Federal Reserve may delay rate hikes supported demand for safe-haven government bonds. US 2 year yields fell by 3 points to 0.355% while US 10 year yields lost 1 points to 2.187%.

* Major currencies rose against the greenback over European and US sessions on Monday. The Euro rose from lows near US$1.2735 to highs near US$1.2810, ending US trade near US$1.2805. The Aussie dollar rose from lows near US87.50c to highs near US87.95c ending the US session near US87.85c. And the Japanese yen strengthened from 107.35 yen per US dollar to JPY106.80, ending US trade near JPY106.85.

* World oil prices eased on Monday, as concerns about over supply and sluggish demand pushed oil back towards last week's four-year low. Traders waited on the OPEC meeting on November 27 with speculation of a potential cut in OPEC oil production. Brent crude fell by US80c to US$85.35 a barrel while the US Nymex crude price fell by 4c to US$82.71 a barrel.

* Base metal prices were mixed on the London Metal Exchange on Monday. Nickel led the declines down 2.1% with zinc (down 1.6%) and copper (down 1.2%) also weaker. On the flip side Tin managed to eke out a 0.3% gain. Gold rose on Monday with the Comex gold futures quote up by US$5.70 an ounce or 0.5% to US$1,244.70 per ounce. Iron ore was up by US60c on Monday or 0.7% to US$81.20 a tonne.

Ahead: In Australia, weekly consumer sentiment and September imports data is released. In China, economic growth & monthly economic data are released at 1pm AEDT. In the US, data on existing home sales is issued.

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