Australian Stock Market Report – Midday 1/31/14
By Tom Piotrowski, CommSec Market Analyst | January 31, 2014 1:34 PM EST
Mid Session Report
The last 12 hours have seen volatility subside relative to the previous day. European and US stock indices finished higher and the atmosphere in currency markets, particularly for emerging markets was stabilising. Notwithstanding the improved general tone sellers has the edge at the open of the local session, although the losses were contained to a modest size.
Asian Shares Bounce from 4-week low (Reuters).
Continued downward pressure on base metals in the face of the US dollar strengthening remains a feature of the current climate. The US Federal Reserve decision to slow its stimulus has reconfigured investor expectations. There is a growing belief that the Fed will continue to wind back support on an increasingly regular basis over the course of this year. Another factor working against metals has been the medium term outlook for Chinese growth after the larger than expected contraction in China's manufacturing sector in January
Department store Myer (MYR.AU) has confirmed an approach made to David Jones (DJS.AU) with the proposal of a merger. The exchange took place last October with a share-based merger being canvassed. The plan was rejected as being inadequate. The view being put by MYR suggests a merger would have created combined revenues of $5 billion in addition to synergistic savings of $85 million within three years. DJS shares are higher by 4 per cent whilst MYR shares are flat.
Financial stocks remained in negative territory overall despite an increase in private sector credit in December. The RBA's financial aggregates for December show total credit increased by 0.5 per cent. Credit has increased by 0.3 per cent each month since August last year. In the tear to December 2013, credit growth expanded by 3.9 per cent, compared to a 3.6 per cent rise the year prior. Personal credit rose by 0.2 per cent in December, whilst business credit increased 0.4 per cent. Demand for home loans remains saw housing credit grow by 0.6 per cent in December after a 0.5 per cent increase in November.
The CBA has adjusted its AUD forecast expecting the local unit to ease to 0.8400 by 2014 year end compared to an earlier estimate of 0.8900. In the context of the AUD's average annual trading range, analysts suggest it's conceivable the AUD trades sub 0.80 at some point in 2014, particularly if Australia's economic transition falters or emerging market fears escalate.
[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
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Lunch with the Gods: Pope Francis Eats with Vatican Workers in Cafeteria
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
Join the Conversation
- El Pollo Loco Shareprice Up 33% on 1st Day of Trading
- South Australia OKs $800M Copper, Gold & Iron Ore Mine on Prime Agri Land in Yorke Peninsula
- Long Beach Real Estate Market Is Pricing Out Home Buyers with Limited Budget
- 93% of Mining Leaders See Extremely Low or Zero Growth Prospect for Industry in Next 1-2 Years; No Immediate Plans by BHP for Olympic Dam Expansion
- Australian Stock Market Report – Morning July 29, 2014
- Google Nexus 6, 8 with Android L on Release Date Promises Killer Mobile Device Experience
- iPhone 6 Release Date Relevance to iOS Newbies: Specs Meaning, Price Considerations
- 12-inch MacBook Apple Retina and 2014 MacBook Pro to Feature Liquid Sensors, Release in October
- Travel at Own Risk; Emirates, Qantas Differ on Flying over Iraq Warzone; Emirates Reroutes, Qantas Pushes On
- The Pirate Bay Releases ‘The Mobile Bay’: Mobile Torrent Download Made Easier but Remains Illegal