Australian Stock Market Report – Morning September 26, 2014

Stock market indices — A pedestrian holding her mobile phone looks at an electronic board showing graphs of various countries' stock market indices outside a brokerage in Tokyo July 22, 2014. Reuters

* In US economic data, durable goods orders fell by a record 18.2% in August after lifting by a record 22.5% in July. The fall was in line with expectation (-18%). Excluding volatile transportations orders rose 0.7% in August. US jobless claims rose by 12,000 to 293,000 in the past week. US flash composite PMI eased from 59.7 to 58.8 in September.

* European shares fell sharply on Thursday, hitting one-month lows in late trade. The stronger US dollar and resulting weakness in commodity prices hurt mining stocks. The STOXX Europe 600 Basic Resources Index fell 2% and was the biggest decliner in Europe. The FTSEurofirst 300 index fell by 0.9%. The German Dax lost 1.6% while the UK FTSE fell 1.6%. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 2.9% while Rio Tinto fell 2.4%.

* US sharemarkets slumped on Thursday weighed down by a drop in Apple shares. Apple lost 3% after it withdrew an update to its new operating system. Selling was broad-based as geopolitical concerns came to the fore, after the Russian high court paved the way to seize foreign assets. All ten S&P 500 sectors were weaker. The S&P technology index was the worst performer down 1.9%. The Dow Jones index fell by 264 points or 1.5%. The broader S&P 500 index fell by 1%, falling through its 50-day moving average. The Nasdaq lost 88 points or 1.9%.

* US treasury prices rose on Thursday (yields lower) as geopolitical tensions and uncertainty in equity markets triggered safe-haven demand. US 2 year yields fell by 4 points to 0.56% while US 10 year yields fell by 6 points to 2.51%.

* Major currencies were mostly weaker against the greenback over the European and US sessions on Thursday. The Euro fell from highs near US$1.2770 to around US$1.2705, ending US trade near US$1.2745. The Aussie dollar fell from highs near US88.25c to lows around US87.70c before ending the US session near US87.80c. The Japanese yen strengthened from 109.35 yen per US dollar to JPY108.65, ending US trade near JPY108.70.

* World oil prices closed mostly flat in a choppy trading session on Thursday. Abundant global supply and a strong US dollar largely outweighed worries that conflict in the Middle East would disrupt output. Brent crude closed up by US5c or 0.1% to US$97 a barrel while the US Nymex price fell by US27c a barrel or 0.3% to US$92.53 a barrel.

* Base metal prices were all weaker on Thursday on the back of the stronger US dollar. Tin (down 2.5%) led the declines with other metals falling between 0.4%-1.2%. Gold prices rose on Thursday with the Comex gold futures quote higher by US$2.40 an ounce or 0.2% to US$1,221.90 per ounce. Iron ore fell on Thursday, down by US80c to US$78.60 a tonne.

Ahead: In Australia, no economic data is released. In the US the final GDP result for the June quarter is released.

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