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

 


IG - afternoon thoughts and European opening calls 4/12/12

Heading into today‘s session we had been predicting the ASX 200 to open modestly weaker, with the benchmark index called down 7 points or 0.15% at 4524. As things currently stand, the market is 10 points or 0.2% lower at 4521, with most sector indices marginally in the red. While a softer open was always on the cards this morning based on US leads, most of the day’s action was expected to have come this afternoon after the RBA rates decision. However, in cutting rates by 25 basis points as was widely predicted, the market’s reaction has been absolutely minimal, with the ASX 200 remaining essentially unchanged. Based on a string of recent weak data points, such as capex spending, job ads, retail sales and building approvals, a multitude of international uncertainties spanning Europe, China and the US and a stubbornly high AUD, it seemed the RBA felt compelled to act with additional easing measures. Yesterday’s flat October retail sales print (against estimates of 0.4% growth) would appear as confirmation that retailers, despite the string of rate cuts in recent months, are yet to see any material improvement in consumer spending. The Christmas shopping season is a crucial period for all retailers, where some make more than 40% of their annual profits, so a buoyant consumer is critical to their bottom-line performance. Shares of the big department stores as well as the likes of discretionary retailers such as Harvey Norman and JB Hi-Fi are mixed after today’s decision. Turning to the European session, yesterday we saw European equities finish marginally higher and the euro modestly firmer against the dollar, with advances driven by a fall in peripheral European debt yields, brought about by Greece announcing details of its debt buyback program. The debt buyback, by way of a Dutch auction, is a key component in the efforts of lenders to put Greece’s debt levels back on sustainable footing and will enable the indebted nation to receive crucial bailout funding to allow it to stave off bankruptcy. While not a definitive solution, any form of debt forgiveness will ease the burden on Greece’s finances and help to ensure it does not have to keep returning to the international lending community for bailout funding. This positive development was offset by a weaker-than-expected US manufacturing PMI print (49.5 versus 51.3 consensus), ensuring gains across European equities and the euro itself were marginal at best. On today’s economic calendar we have Spanish unemployment, European PPI and UK construction PMI to look forward to; however, as is now the norm, headlines surrounding the fiscal cliff are likely to be the major influences of market sentiment. Ahead of the European open we’re calling the FTSE -14 at 5857, the DAX -23 at 7412 and the CAC -7 at 3559.

ENDS

www.igmarkets.com

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news