Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


IG - Afternoon thoughts November 23, 2012

FTSE 5793 +2
DAX 7258 +13
CAC 3500 +2
IBEX 7882 +6
DOW 12860 +23
NAS 2602 +2
S&P 1393 +2

Oil 87.16
Gold 1729

Asian markets are having a fairly subdued day with the US being closed overnight and Japan offline today as well. With US markets closed, risk sentiment was solely pinned on developments out of Europe. Some positive European PMIs set a positive tone for equities in the European session and helped other risk assets remain fairly well bid. French, German and European manufacturing PMIs all showed a modest improvement and helped encourage investors. Growth was a key theme yesterday, with China also posting a positive PMI reading. Spain raised €3.88 billion at an auction, exceeding a target of €3.5 billion as it looks to take advantage of calmer yields to fund itself for 2013. However, this effectively delays hopes of Spain formally requesting a bailout and activating the OMT on hold. We haven’t had any fresh leads in the Asian session, but risk assets continue to hold near yesterday’s highs. AUD/USD is just shy of 1.04, while EUR/USD is a touch below 1.29.

Looking at the equities in the region, the ASX 200 is down 0.1%, the Shanghai Composite has climbed 0.5% and the Hang Seng has tacked on 0.3%. The Nikkei is closed today for Labor Thanksgiving Day. Ahead of the European open, we are calling the major bourses mildly firmer. The DAX has performed very well, pushing up 4.2% on the week. Technically there are signs the rally may run out of steam in the short term, with the index trading above (but failing to close above) the 61.8% retracement of the November 7 to November 16 sell-off at 7249. A break of this level could take the index to strong resistance at 7407 – the downtrend resistance drawn from the September 21 high. In upcoming European trade, we get reads on German IFO business confidence and final Q3 GDP. Strong results here could help the German market, which will be searching for direction given US markets will be closing early and should see minimal volumes. It is worth pointing out that the Spanish region of Catalan will be going to the polls on Sunday; it will be interesting to see if nationalist leader Arthur Mas will achieve the majority needed to hold a much-publicised referendum to form independence.

Of course, on Monday we also get the EU meeting (take two) on plans to help Greece achieve ‘debt sustainability’. Key European officials have been making the right noises in the last couple of days that an agreement will be met, however given Wednesday’s disappointment, will traders be as keen to bid up risk assets into the meeting, given we are just so accustomed to disappointment? A failure to form an agreement between the EU and IMF on Greece’s debt sustainability (i.e. getting debt to 120% of GDP) would almost certainly see the DAX, EUR and other risk assets take a strong hit.

The ASX 200 has shed 0.1% and is currently trading at 4407 with no dominant risk theme in place. Near-term support for the local index is at around 4400 and we are likely to see some consolidation at around that level after the recent positive run we’ve seen in local equities. Buying the dips might not be such a bad idea as there is no reason at this stage to believe this level should break. For the week so far, the ASX 200 has climbed 1.8% and this might be the beginning of a steady recovery. Of course, there are still a few hurdles ahead with the European finance ministers’ meeting on November 26 and fiscal cliff talks continuing. Should both events be concluded successfully, one can only assume we will be in for a good run into the end of the year and possibly get back to the levels we were trading in the lead up to the US presidential elections. Cabcharge (CAB) has plunged over 5% after being downgraded by JP Morgan to Underweight. The broker has downgraded its recommendation due to the significant uncertainty surrounding the future value of the CAB business model.

www.igmarkets.com

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: Weak Dairy Prices Prompt Pull Back In Fonterra Forecasts

Weak global dairy prices have prompted analysts to pull back their expectations for Fonterra Cooperative Group's payout to farmers for next season. More>>

Broadband Network: Spark Launches New, Competitive Ultra Fibre Plan Line-Up

Spark is giving customers an even more compelling reason to switch to its Ultra Fibre plans from today with the introduction of new competitive pricing for the majority of its plans (details below) and Fibre Landline (voice-over-fibre technology) for ... More>>

Employment: ANZ Proposes Casualisation In Whangarei Stores

ANZ workers in Whangarei could see their incomes drop by 20 to 40 percent if the bank’s proposal to reduce the number of full-time positions goes ahead says FIRST Union national organiser Tali Williams. More>>

Finance: BNZ Develops Specialist Tāmaki Māori Banking Team

BNZ develops specialist Tāmaki Māori Banking Team to support Māori as Auckland grows More>>

Pharmaceuticals: Commerce Commission To Consider Pharmaceuticals Merger

The Commerce Commission has received an application from Pfizer Inc. seeking clearance to acquire all of the shares in Hospira Inc. More>>

Real Estate: Housing Unaffordability Issues Spread

Surging house prices in Auckland and Queenstown last month pushed home ownership even further beyond the reach of first home buyers in the two districts, according to the AMP360 Home Loan Affordability Report for March. More>>

Statistics NZ: Annual Exports To China Dip Below Australia

The value of goods exports to Australia ($8.7 billion) surpassed those to China for the year ended March 2015, Statistics New Zealand said today. More>>

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news