Thursday: 25th May 2017
Each Market In Focus
- At 8.00 a.m. AEDT on Thursday, the local share price index was up 12 points, or 0.21 per cent, at 5,786.
- The Aussie dollar recovered from the losses it suffered on Wednesday after Moody’s first ratings downgrade on China since 1989 renewed concerns about the economic strength of Australia’s key trading partner.
- The local currency hit a low of 74.43 US cents after the ratings agency downgraded China’s long-term credit rating to A1 from Aa3, reflecting its view that China’s financial strength will weaken in the coming years as economy-wide debt rises and potential growth slows.
- It later recovered somewhat, to stand at 74.59 US cents at the end of the trading day.
- Locally, in economic news on Thursday, Reserve Bank of Australia governor Guy Debelle is slated to deliver the opening remarks at the launch of the FX Global Code.
- In equities news, Aristocrat is expected to post half-year results, while Adelaide Brighton holds its annual general meeting in Adelaide.
- The Stockbrokers and Financial Advisers conference wraps up in Sydney and the two-day Australian Retail Banking Summit starts, also in Sydney.
- The Australian market on Wednesday closed slightly higher with the miners and major banks lower, but most other sectors stronger.
- The benchmark S&P/ASX200 index rose 8.8 points, or 0.15 per cent, to 5,769 points.
- The broader All Ordinaries index gained 8.7 points, or 0.15 per cent, to 5,811.5
60 Day High. This is a list of codes that made a new 60 day High in the past 2 days. We use the 60 day high as this would infer that a breakout in price has occurred after a period of consolidation OR the stock is moving up each day if the code shows repeatedly. ( source MetaStock )
60 Day Low. This is a list of codes that made a new 60 day LOW in the past 2 days. We use the 60 day low as this would infer that a breakdown in price has occurred after a period of consolidation OR the stock is declining each day if the code shows repeatedly. ( source Metastock)
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- US stocks have ended slightly higher, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve’s latest meeting showed policymakers view a rate rise as coming soon.
- But, according to the May 2-3 meeting minutes, they also agreed they should hold off on raising interest rates until they know a recent US economic slowdown was temporary.
- Stocks were volatile following the minutes’ release, but eventually added to small earlier gains.
- The S&P financial index, which fell right after the minutes came out, rebounded to end down just 0.04 per cent. Banks tend to benefit from higher borrowing rates.
- The Dow Jones Industrial Average was up 0.36 per cent at 21,012.42, the S&P 500 gained 0.25 per cent to 2,404.39 and the Nasdaq Composite added 0.40 per cent to 6,163.02.
- It was also a fifth straight day of gains for the S&P 500.
- Following the Fed minutes’ release, traders scaled back bets on two more rate increases by the end of 2017.
- Gold prices closed down 0.2% at $1,253.10 a troy ounce. Prices were little changed after the release of minutes from the Federal Reserve’s last monetary policy meeting, which showed officials believe it would “soon be appropriate” to raise short-term interest rates once again.
- IRON ORE: $61.50 -0.40( May contract )
A five-day rally in oil prices paused Wednesday as investors awaited OPEC’s decision about extending production cuts.
The Organization of the Petroleum Exporting Countries is meeting in Vienna Thursday to decide whether to extend a production cut agreement struck late last year and for how long.
Investors were weighing possible scenarios and tracking headlines streaming from Vienna Wednesday.
U.S. crude futures settled down 11 cents, or 0.2%, at $51.36 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, fell 19 cents, or 0.4%, to $53.96 a barrel on ICE Futures Europe.
- The U.S. dollar slipped Wednesday after minutes from the Federal Reserve’s latest meeting did little to alter investors’ expectations for interest-rate increases in the months ahead.
- The WSJ Dollar Index, which measures the U.S. currency against 16 others, fell 0.3% to 88.61. It had been up less than 0.1% before the minutes were released.
- The minutes showed Fed officials continue to expect to raise rates soon even though the economy appeared to stumble in the first quarter.
- Still, some officials expressed concern about recent softness in inflation and other economic data.
Minutes also indicated that the Fed is moving toward a consensus on a plan to shrink its $4.5 trillion in holdings of Treasury and mortgage securities later in the year by gradually allowing increasing amounts of those securities to mature without reinvesting them.
- The Australian dollar is sharply higher against its US counterpart, breaching above 75 US cents after the Federal Reserve’s minutes ruffles investor sentiment and the greenback.
- At 7.00 AEST on Thursday, the Australian dollar was worth 75.03 US cents, up from 74.59 US cents on Wednesday.
European shares, stuck just below 21-month highs for more than a week, struggled to gain momentum on Wednesday, with strength in banks and big oil majors offset by weakness in miners and autos.
The pan-European STOXX 600 index ended up 0.1 per cent.
Among the national markets, Britain’s FTSE 100 rose 0.4 per cent
Germany’s DAX fell 0.1 per cent to 12,642.87, weighed down by stocks including Hugo Boss and Evonik going ex-dividend.
UK blue chip stocks rose on Wednesday, helped by gains in Marks & Spencer after its solid results and by advances in energy stocks, although weaker miners kept a lid on the British market.
The FTSE rose 0.4 per cent to 7,514.90 points, while the mid-cap FTSE 250 index added 0.15 per cent, just shy of a fresh record high hit on Tuesday.
The index’s gains were capped by losses in basic resources stocks after a sell-off in commodities following Moody’s debt downgrade on China, a big global metals consumer.
- Many Asian markets had the jitters after Moody’s downgraded its sovereign credit rating on China, adding to worries about the global impact of slowing growth and rising debt in Asia’s economic powerhouse.
- Moody’s Investors Service cut China’s credit ratings by one notch to A1 from Aa3, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.
- Mainland Chinese stocks fell on the news, but investors in Hong Kong were more sanguine.
- MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, while Japan’s Nikkei stock index managed to end 0.7 per cent higher.
- Hong Kong stocks rose for a fourth day to a fresh 22-month high, shrugging off Moody’s downgrade of China’s sovereign credit rating.
- The Hang Seng index ended up 0.1 per cent at 25,428.50 points, while the China Enterprises Index was unchanged at 10,390.87.
- China’s main stock indexes recouped earlier losses to end roughly flat on Wednesday, as strong gains in small-caps partially offset Moody’s downgrading of China’s debt ratings.
- The blue-chip CSI300 index was unchanged at 3,424.17 points, while the Shanghai Composite Index added 0.1 per cent to 3,064.08 points.
- The S&P/NZX 50 Index rose 0.5 per cent, to 7421.78.
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