Australian Stock Market Report – Morning July 22, 2014

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By Craig James, CommSec Chief Economist | July 22, 2014 9:27 AM EST

A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth
A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth

Morning Report

(06:10 AEST)

European shares eased on Monday with investors concerned about ongoing tensions between Russia and western nations. Fresh violence has flared up in Donetsk in eastern Ukraine. The FTSEurofirst 300 index fell by 0.5% with the German Dax down by 1.1% while the UK FTSE lost 0.3%. Australia´s major miners were mixed in London trade with shares in BHP Billiton up by 0.1% while Rio Tinto lost 0.2%. 

US sharemarkets fell in early trade before clawing back losses over Monday´s session. Traders and investors awaited a bevy of earnings results to be released over the week together with a number of key economic indicators. Shares in fast food companies lost ground after a new food safety scare in China. After being down 126 points in early trade, the Dow Jones index ended lower by 48 points or 0.3%. The S&P 500 index lost 0.2% while the Nasdaq eased by 7.4 points or 0.2%. 

US treasury prices were largely flat on Monday with traders biding their time ahead of key economic data to be released later in the week. US 2 year yields were flat at 0.492% while US 10 year yields were down 1 point to 2.473%. 

Major currencies were modestly weaker against the US dollar following European and US sessions on Monday. The Euro fell from highs near US$1.3545 to around US$1.3515, before ending US trade near US$1.3520. The Aussie dollar eased from lows near US93.95c to lows near US93.70c before ending the US session near US93.75c. And the Japanese yen weakened from 101.21 yen per US dollar to JPY101.39, ending US trade near JPY101.38. 

World oil prices rose on Monday on fears of possible disruptions to global oil supplies from geopolitical tensions in Eastern Europe and the Middle East. Brent crude rose by US44c or 0.4% to US$107.68 a barrel and the US Nymex price lifted by US$1.46 a barrel or 1.4% to US$104.59 a barrel. Nymex gained more than the Brent crude quote as traders positioned ahead of contract expiry.

Base metal prices rose by up to 2.0% on Monday with aluminium and zinc leading the way. Gold prices rose modestly on Monday in response to geopolitical tensions with the Comex gold futures quote up by US$4.50 or 0.3% to US$1,313.90 per ounce. Iron ore fell by US60c on Monday or 0.6% to US$96.00 a tonne. 

Ahead: The Reserve Bank Governor delivers a speech. In the US, the Consumer Price Index, the FHFA monthly home price index, existing home sales data and Richmond Federal Reserve index are all released. 

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A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth
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