World Market Insights: IG Markets

IG Markets Analyst Ben Potter offers this insight for the market:

On Wall Street overnight, stock finished the quarter and end of the first half in bullish fashion, logging its fourth consecutive gain as Greece passed a second crucial vote on the implementation of the latest austerity package and a much stronger-than-expected Chicago PMI number.

The Dow Jones Industrial Average was the top performer, up 1.3% while the NASDAQ and S&P 500 added 1.2% and 1% respectively.

Locally, the ASX 200 is called to open the session 0.6% firmer at 4634 following another bullish session in the US. Gains were widespread but led by the industrial, energy and materials names, with the commodity based stock helped by a falling US dollar.

The industrial sector was the top performer, adding 1.6% as the likes of Boeing and Caterpillar rose more than 1.7%, boosted by the Chicago PMI reading.

Materials names are likely to see another positive session after the US sector rose 1.2% and base metal leads from the LME were mostly higher. In normal London equities trade, Rio Tinto and BHP Billiton rose 1.8% and 2% respectively. BHP's ADR is calling the locally listed stock to open 0.8% higher at $44.14. Elsewhere, gold stocks may come under a bit of pressure after the precious metal retreated 0.7% to be trading around the US$1500.50/oz mark.

It's hard to tell how our energy names will trade after the US sector bucked leads from the crude oil market, rising 1.5% while oil futures slipped 0.2% to US$94.97/bbl. Nonetheless, it will be worth keeping an eye on the likes of the Woodside Petroleum given the huge amounts of tax loss selling that hit the stock in late June.

Elsewhere, the consumer discretionary and staples sector will likely remain well supported following strong overnight performances while the financial space will probably post more modest gains.

In summary, it looks like the local market is set to continue its three-day bounce on the open, with commodity based stocks likely to lead the march higher. Given it's the start of the new financial year, the market may be helped by investors looking to buy back holdings they disposed of for tax purposes. However, on the flipside, we might see some Friday afternoon profit taking creep in given the market is up 2.2% for the week and the US market is closed for Independence Day holiday on Monday.

Traders will be paying attention late morning to the latest reading into Chinese Manufacturing PMI due at 11am AEST. Following last month's figure of 52.1, the market is expecting a reading of 52.2, so largely unchanged for May.

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday's close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

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