IG Markets: Morning Prices

On Wall Street, US stocks finished the session lower as worse-than-expected results from the likes of Cisco and Walt Disney weighed on sentiment as the US dollar rose on continued worries over European sovereign debt.

The NASDAQ was the worst performer, losing 0.9% while the Dow Jones Industrial Average and broad-based S&P 500 fell 0.7% and 0.4% respectively.

In Australia, the ASX 200 is called to open the session 0.4% softer at 4710 following the negative overnight leads. Whilst the market finished in the red, both the heavily weighted materials and energy sectors were the best performers, rising 1% and 1.1% respectively.

This should bode well for Australian material names despite lower base metal leads from the London Metals Exchange. In normal London trade, Rio Tinto and BHP Billiton added 1.6% and 0.1% respectively, with BHP Billiton’s ADR calling the locally listed name 0.7% firmer at $44.90. Gold names should remain reasonably well supported after the precious metal made modest gains overnight to be currently trading around the US$1408.9 per ounce level.

It’s hard to tell how energy names will fare on the open as the stronger performance in the US was offset by a fall in Crude Oil prices.

On the downside, the technology and financial sectors were the biggest detractors, falling 1.5% and 1% respectively. Cisco was the big tech drag, losing 16.2% after its result missed market expectations. However, this is unlikely to have too much of an impact on the local market after it was released yesterday morning our time.

We would expect to see some weakness among our banks after the US financials came under pressure. The likes of Bank of America, JP Morgan, Wells Fargo and Citigroup were all down between 1.4% and 1.6%.

In summary, it looks like we’ll see a weaker open this morning with strength among material names likely offset by selling among financial stocks. There is little in the way of economic news today although there is likely to be continual comments emanating from the G20 meetings in Korea.

On the currency front, the euro slid to the lowest level in more than a month as concerns over the sovereign debt crisis in Europe continue to weigh on the currency. This subsequently saw the US dollar index rise for the fifth straight session. The euro traded a low of 1.3636 as traders globally reduced their risk appetite. This reduction also weighed on the AUDUSD, with traders pushing it to an overnight low of 0.9955. It’s currently hovering around the 0.9980 level.

The continual rhetoric coming out of the G20 will keep currency markets on their toes while tonight’s European GDP numbers will likely by the major focus.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9978 -0.0068 -0.67%
ASX (cash) 4710 -18 -0.39%
US DOW (cash) 11282 -36 -0.32%
US S&P (cash) 1213.3 0 0.02%
UK FTSE (cash) 5834 2 0.04%
German DAX (cash) 6739 -2 -0.03%
Japan 225 (cash) 9840 -18 -0.18%
Rio Tinto Plc (London) 44.02 0.69 1.58%
BHP Billiton Plc (London) 24.13 0.03 0.12%
BHP Billiton Ltd. ADR (US) (AUD) 44.90 0.31 0.70%
US Light Crude Oil (Dec) 87.73 -0.53 -0.60%
Gold (spot) 1408.8 2.8 0.20%
Aluminium (London) 2465 -5 -0.20%
Copper (London) 8844 -66 -0.74%
Nickel (London) 23950 -481 -1.97%
Zinc (London) 2534 -34 -1.32%
RBA Cash Rate to be raised by 25bp (Dec) (%) 5.00 -3 -3.00%

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