MORNING MARKET REPORT Friday, 30 May 2008
(Oil is the July contract on the NY Mercantile Exchange (NYMEX). Gold is the June contract on the COMEX division of the NY Mercantile Exchange, while Silver is the July contract on the COMEX.)
NEW YORK - US stocks rose on Thursday as a sharp drop in oil soothed inflation fears, while an upward revision in a broad measure of US economic growth suggested a recession may be avoided for now.
The Dow Jones industrial average ended up 52.19 points, or 0.41 percent, at 12,646.22. The Standard & Poor’s 500 Index was up 7.42 points, or 0.53 per cent, at 1,398.26. The Nasdaq Composite Index was up 21.62 points, or 0.87 percent, to close at 2,508.32.
LONDON - Britain’s blue-chip index ended unchanged as near-record crude prices boosted commodity shares but economic and rights issue concerns dragged banks lower.
During a thin trading session, the FTSE 100 ended down 1.5 points or 0.02 per cent at 6,068.1, after earlier hitting a high of 6,130.5. The UK’s main share index has now lost 6 per cent this year.
FRANKFURT - The DAX index ended at 7,055.03 points, up 21.19 or 0.30 per cent.
PARIS - The CAC-40 index closed at 4,975.9 points, up 4.79 or 0.10 per cent.
TOKYO - The Nikkei stock average rose 3.03 per cent, posting its biggest daily gain in eight weeks, led by exporters such as Canon Inc on a softer yen and surprisingly strong US durable goods orders.
The Nikkei ended up 415.03 points at 14,124.47 after falling 1.3 per cent the previous day.
HONG KONG - Stocks rose 0.55 per cent, tracking firmer regional markets, after data showed surprisingly strong US business spending, but offshore oil producer CNOOC fell as crude prices declined.
The benchmark Hang Seng Index ended up 134.48 points at 24,383.99, helped by a 4.2 per cent rise in Asia’s top refiner Sinopec.
WELLINGTON - The sharemarket halted over a week of declines today with a broad-based recovery.
The NZSX-50 index closed up 16 points, or 0.5 per cent, at 3563.1 on turnover totalling $NZ104 million ($A85.06 million).
SYDNEY - The Australian share market may open slightly lower after sharp declines in all industrial metals prices and falls in gold and oil are likely to weigh on resource stocks.
Still, losses may be limited after US stocks gained overnight on an upward revision of economic growth.
At 0740 AEST on the Sydney Futures exchange, the June share price index was down 20 points at 5,707.
In economic news today, the Reserve Bank of Australia releases financial aggregates data for April.
In company news, Babcock and Brown Ltd, Midwest Corporation Ltd, Cluff Resources Pacific NL, Anzon Australia Ltd, Gondwana Resources Ltd and Bemax Resources Ltd hold annual general meetings.
Primary Health Ltd holds a general meeting.
Yesterday, the Australian share market closed higher, with increased oil prices and a big gas deal involving Santos placing much of the focus on the energy sector.
The benchmark S&P/ASX200 index rose 61.3 points, or 1.09 per cent, to 5709.4, while the broader All Ordinaries gained 62.7 points, or 1.09 per cent, to 5,817.2.
NYMEX
Oil prices dropped $US4 on Thursday as concerns about global energy demand and strength in the dollar countered a government report showing the biggest decline in US stockpiles since 2004.
US crude settled down $US4.41 at $US126.62 a barrel.
London Brent gave up $US4.04 to $US126.89 a barrel.
The decline extends oil’s retreat from last week’s record above $US135 a barrel amid growing signs that global energy demand growth is slowing under the strain of high costs and economic turmoil in the United States.
In New York, heating oil futures tanked ahead of the front-month June contract’s expiration on Friday and after EIA data showed a larger-than-expected supply increase.
Gasoline futures reversed to the loss column after spiking to a fresh intraday high on data showing a much larger-than-expected drawdown.
NYMEX June heating oil was down 14.93 cents or 3.9 per cent at $US3.6830 a gallon. It reached a record $US4.0153 last Thursday.
NYMEX June RBOB, which also expires on Friday, was down 4.0414 cents or 1.2 per cent at $US3.4062 a gallon, trading from $US3.4040 to $US3.52 which eclipsed the prior record of $US3.4580 hit just Wednesday.
LONDON METAL EXCHANGE
Industrial metals lead, zinc and tin fell sharply today, hit by waning demand and rising stockpiles in warehouses.
Tin was the biggest loser, falling $US2,600 or more than 10 per cent to close at $US21,100 per tonne, its lowest since April 15. Despite the steep fall, tin is still up 27 per cent on the year so far.
Lead and zinc also took heavy knocks, closing down $US76 at $US1,952 and $US140 at $US1,980 respectively.
Selling was widespread, with copper for delivery in three months, often seen as a benchmark of the metals market, breaking below key support at $US8,000 a tonne to close at $US7,890, down $US205 and its lowest since March 20, after losing 1.2 per cent in the previous session.
Three-months zinc fell 6.7 per cent to $US1,977, its lowest since February 2006.
Nickel lost momentum after trading in positive terrain earlier in the session, with prices down over 20 per cent in the past month on sluggish demand from stainless steel producers.
Nickel closed at a quote of $US22,200 a tonne, down $US300, after shedding 3.4 per cent in the previous session.
Aluminium fell $US80 to close at $US2,880 a tonne.
COMEX
Gold and other precious metals ended sharply lower on Thursday, as a tumultuous drop in crude oil prices combined with a dollar rise dampened bullion’s appeal as an alternative investment.
Gold fell more than 2 per cent to a two-week low, with platinum slipping more than 4 per cent to touch a three-week trough and silver shedding 4.3 per cent in choppy trade.
Spot gold fell as low as $US874.05 an ounce and was last at $US878.55 an ounce by New York’s last quote, down from $US900.35 in New York late on Wednesday.
In other markets, US gold futures for August delivery on the COMEX division of the New York Mercantile Exchange ended down $US23.30, or 2.6 per cent, at $US881.70 an ounce.
Platinum fell to a low of $US1,967 an ounce, its lowest since May 8, and was last at $US1,997.50, against $US2,069 in New York late on Wednesday.
Spot silver sank to $US16.65 an ounce from $US17.40 late in New York on Wednesday, while palladium fell to $US425.50 from its Wednesday close of $US436.
INTERNATIONAL NEWS
WASHINGTON - The US economy grew at an annual 0.9 per cent pace in the first quarter of the year, the government said Thursday in an upward revision that calmed the nerves of some economists.
NEW YORK - Sugar futures tumbled to a seven-month low today as investors bet that a glut in supplies will push prices down until major sugar growers like Brazil and India scale back production.
NEW YORK - Bear Stearns, the most high-profile victim of the US sub-prime property crisis, approved a deal today to sell itself to banking giant JPMorgan Chase, a spokeswoman for the Wall Street firm said.
NEW YORK - Australian private equity firm Pacific Equity Partners is buying US share registry American Stock Transfer & Trust for close to $US1 billion ($A1.04 billion), a source familiar with the situation said.
CHICAGO - General Motors said Thursday about 19,000 of its US hourly employees accepted buyouts as part of an attrition program, with most leaving the company by July 1.
GENEVA - The international airline industry faces a “grim” outlook as soaring fuel costs and economic turmoil hit passenger numbers, the International Air Transport Association (IATA) warned.
PARIS - The paper airline ticket comes to the end of its life on Sunday when 240 carriers belonging to the world association IATA switch to all electronic ticketing, much of it through internet booking.
PARIS - French riot police cleared striking fishermen from several oil depots on Thursday as fleets in Italy, Spain and Portugal prepared to join Europe-wide protests over fuel prices.
PARIS - Russian ex-president Vladimir Putin on Thursday discussed soaring oil prices and EU-Russia relations during a visit to France, his first trip abroad since becoming prime minister.
MOSCOW - Russian shareholders in the country’s third-largest oil producer TNK-BP called Thursday for president and chief executive officer Robert Dudley to resign, the Interfax news agency reported.
LOCAL NEWS
SYDNEY - ANZ is considering paying Opes Prime clients $350 million in compensation for liquidating their share portfolios, in an effort to put an end to the damage the bank has incurred from the fallout from the broker’s collapse.
SYDNEY - Qantas chief executive Geoff Dixon says all bets would be off if there is a further increase in oil prices, directly affecting aviation fuel.
STOCKS TO WATCH ON THE AUSTRALIAN STOCK EXCHANGE TODAY:
TAL - TOWER AUSTRALIA GROUP LTD - up 14 cents to $2.99
Tower has forecast the life insurance market to treble by 2017 after it posted a 19 per cent lift in underlying first half profit on the back of growing retail and group premium revenue.
STO - SANTOS LTD - up $2.10 to $21.08
Santos, Australia’s third largest oil and gas producer, signed a $2.6 billion partnership with Malaysia’s Petronas to build an LNG plant in Qld.
RIO - RIO TINTO LTD - up 2.42 to $144.37
Rio Tinto says it is well placed to take advantage of an expected doubling in global demand for its metals and minerals by 2022.
ANZ - ANZ BANKING GROUP LTD - down seven cents to $21.35
ANZ Banking Group will not help finance Gunns Ltd’s controversial $2 billion Tasmanian pulp mill.
TLS - TELSTRA CORPORATION LTD - down one cent to $4.74
Yesterday was the final day for Telstra’s T3 instalment receipt holders to pay the final $1.60 to convert the security into an ordinary share.
EBB - EVEREST BABCOCK AND BROWN LTD - down one cent to 58 cents
Everest Babcock & Brown Ltd said reduced assets under management and lower performance fees would affect its full year earnings.
GNC - GRAINCORP LTD - down 25 cents to $11.35
Graincorp has posted a first half loss after the drought impacted its earnings, and announced a restructure of its business that may result in acquisitions.
TBG - TUTT BRYANT GROUP LTD - up 14 cents to $1.65
Tutt Bryant says the company is well positioned for further growth organically and through acquisitions after delivering a rise in full year profit.
AUN - AUSTAR UNITED COMMUNICATIONS LTD - four cent to $1.34
Regional pay television operator Austar has confirmed it expects growth of 20 per cent-plus in operating cash flow in calendar 2008 from higher subscriber numbers.
QAN - QANTAS AIRWAYS LTD - up six cents to $3.51
Qantas has dismissed as “out of order” claims by striking engineers for a five per cent wage claim, warning it will not be entertained.
FPA - FISHER & PAYKEL APPLIANCES HOLDINGS LTD - up three cents to $1.82
Fisher & Paykel Appliances Holdings blamed the high NZ dollar dollar for a 14 per cent fall in its March net profit to $NZ54.2 million ($A44.67 million).
