The Australian sharemarket kicked off the new week in the red, with the All Ordinaries Index (XAO) down 0.2 pct or 9.9 pts to 4354.2. Weakness from the miners and energy players dragged the market lower today. On a positive note, we are almost 10 weeks into the year and local shares have improved by 5 pct. The Brazilian market has been one of the standouts and has gained by 19 pct in 2012 while German shares have jumped by 17 pct.
The S&P/ASX 200 Materials index (a measure of stock performance in the mining sector) fell 0.83 pct or 93.2 pts to 11196.1. Rio Tinto (RIO) lost 1.27 pct or 84 cents to $65.09 while the larger BHP Billiton (BHP) fell by 0.84 pct or 30 cents to $65.09.
The major banks were mostly lower in the second half of trade however ended mixed by the close. ANZ Banking Group (ANZ), was the best performer after rising by 0.91 pct or 20 cents to $22.20. National Australia Bank (NAB) edged higher by 0.34 pct or 8 cents to $23.53, while the other two majors ended largely flat.
The retailers were mixed, with David Jones (DJS) and JB Hi-Fi (JBH) managing to end a little higher.
Queensland based insurance company, Suncorp (SUN) said it received 500 claims from flood victims across NSW, however only eased slightly today. At the end of last month, SUN recorded a 74.4 pct rise in first half profit (July to December 2011) to $389 million. This was better than market consensus.
Singapore Telecomm (SGT) said it will buy a U.S based provider of mobile advertising solutions for US$321 million today. This will be its first major acquisition since 2007 and its shares ended flat today.
On the economic front today, the latest inflation gauge, services index, job advertisement and company profit numbers were released in the first half of the session.
The number of job advertisements rose by 3.3 pct in February, adding to the 7.5 pct improvement recorded in January. Commsec's Chief Economist, Craig James said that "Job ads have now risen three times in the past eight months. Job ads are up 3.6 per cent on a year ago. Newspaper job ads actually fell by 8.6 per cent in February, while the far larger component of internet job ads rose by 3.8 per cent."
Inflation hit a 2-year low today and the Performance of Services index slumped by 5.3 pts to 46.7 in February.
The start of a new season and month tends to be a busy time for economic news, and this week will be no different. Tomorrow, the Reserve Bank of Australia (RBA) will be meeting to make a decision on interest rates. The market is expecting rates to remain on hold at 4.25 pct, with a 20 pct likelihood of a rate cut being factored in by the market.
On Wednesday, the latest GDP (economic growth) reading will be announced and the market is forecasting a 0.8 pct expansion for the Australian economy.
February's employment and unemployment report is expected to be issued on Thursday. The jobless rate is likely to remain steady at around 5.1 pct and around 15,000 jobs are forecast to have been added over the month.
International trade numbers for January will be issued on Friday and a $1.4 billion surplus is expected over the month.
No major economic data was scheduled for release in the region today; however a number of reports will be issued in the latter part of the week. Shares in Thailand will not be trading on Wednesday due to a public holiday, while the Indian markets will be shut on Thursday. In Japan, the latest GDP (growth) reading will be delivered for the previous quarter. The market is expecting the Japanese economy to have contracted by around 0.2 pct over the three months between October and December last year.
On Friday, a barrage of economic indicators will be issued in China. This will include the latest inflation reading (CPI), in addition to retail sales and the world's second largest economy's trade balance (exports minus imports). This data tends to be market moving for most global markets if the results surprise investors and market participants.
Last week, shares in China rose by 0.86 pct, 0.73 pct in Hong Kong, 1.34 pct in Japan, however eased by 0.57 pct in Australia.
In Europe tonight, the latest retail sales report will be issued for January while the Sentix Investor Confidence index will be calculated at 8.30pm (AEDT). This is a survey of around 2,800 investors and analysts which asks about the economic outlook for the Eurozone. A reading above 0.0 indicates optimism. The market is expecting investor confidence to have slumped by approximately 5.7 pct over the month.
Looking ahead, on Thursday both the Bank of England and the European Central Bank (ECB) will be holding their monthly meetings on monetary policy. Both central banks (their equivalents of Australia's Reserve Bank) are expected to keep rates on hold. On Friday, the final approval for the full amount of the second Greek bailout package is expected to occur.
In the U.S tonight, a report on the change of factory orders will be issued, however the big piece of data to be delivered will be on Friday night with the latest non-farm payrolls (jobs report) to be issued. The market is expecting an additional 200,000 jobs to have been created in February and for the unemployment rate to remain steady at 8.3 pct.
Activity was light today, with the volume of shares traded coming in at 1.78 billion today, worth $3.48 billion. 469 shares were up, 522 were weaker and 417 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is down 0.05 pct or 2 pts to 4266.
Due to daylight savings, most major European markets are now trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe are pointing to a slightly weaker start to trade tonight.
Dow Futures are currently lower; indicating that U.S stocks could open weaker tonight. American markets open at 1.30am (AEDT). Due to the Americans going back an hour on November 5 last year, U.S markets will be trading between 1.30am (AEDT) and 8am (AEDT).
Turning to currencies, the Australian dollar (AUD) buys US107.1 cents. The AUD is currently trading at £67.7 pence and €81.1 cents.
Steven Daghlian, CommSec Market Analyst
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook.
Follow us on Twitter.
Subscribe to get this delivered to your inbox daily