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Australian shares are set for strong early gains after world markets rose on strong US retail data and hopes that Spain would soon request a bailout.
On the ASX24, the SPI futures index was 25 points higher to 4506. The Aussie dollar was also higher. It was recently buying $US1.0255, up from $US1.0223 late yesterday.
All eyes will be on Nine Entertainment today as principal stakeholders meet for what could be the last attempt to keep the media group out of administration. For Nine to survive, its chief executive, David Gyngell, and chairman, Peter Bush, must decide whether there is a reasonable basis to believe its lenders can agree to a deal that means the business can pay its debts as they fall due.
Elizabeth Knight writes that the future of Nine has descended into a game of brinkmanship, and all the players are preparing for the possibility that the business could be declared insolvent.
What you need to know
- SPI futures are 30 points higher at 4411
- The $A is higher at $US1.0252
- In the US, the S&P500 rose 0.81% to 1440.14
- In Europe, the FTSE100 rose 0.21% to 5805.61
- Gold fell $21.20 to $US1738.50 an ounce
- WTI crude oil fell 15 cents to $US91.71 a barrel
- Reuters/Jefferies CRB index is down 0.75% at 306.55
China iron ore has eased for a third session. The bulk commodity lost $US1.50 to $US113. The big miners were mixed in US trade. BHP added 0.12 per cent while Rio lost 0.86 per cent.
US retail sales rose in September as Americans stepped up purchases of everything from cars to electronics, a sign that consumer spending is driving faster economic growth. Other US data on Monday pointed to an economy feeling the effects of cooling global growth, with New York state factory activity shrinking in October.
Making news today
In economics news:
- Minutes of Reserve Bank of Australia (RBA) October 2 monthly board meeting released
- HIA - RP Data Residential Land Report, June quarter
In company news:
- Fortescue Metals Group Q1 report
- Rio Tinto Q3 review
- The following companies hold annual general meetings: Telstra, News Corp (New York), Cochlear, Coffey International
Analyst rating changes:
- Evolution Mining cut to 'underperform' at Credit Suisse
- Santos raised to 'outperform' at Credit Suisse
- Oil Seaerch cut to 'neutral' at Credit Suisse
- Newcrest Mining raised to neutral at Credit Suisse
- PanAust cut to underperform at Credit Suisse
The dollar
The Australian dollar is higher on improved US data and ahead of a release of board meeting minutes from the Reserve Bank of Australia (RBA).
At 7am AEDT, the currency was trading at $US1.0255, up from $US1.0223 at Monday’s close.
BK Asset Management managing director Kathy Lien said a strong reading for US data overnight had provided support for the Australian dollar.
‘‘US retail sales data was quite strong overnight, and that’s driving a rally in risk appetite, with US stocks rising as well,’’ she said.
‘‘Being a risk currency, the Australian dollar has benefited from better Chinese and US data over the past 24 hours.’’
Ms Lien said the release on Tuesday of minutes from the RBA’s October meeting would be well-watched by the market for clues on how the bank could move in the future.
‘‘I think the risk is to the upside,’’ she said. ‘‘While there’s a very good chance the RBA will be dovish, given their rate cut decision earlier this month, I think they will avoid dropping hints about their future monetary policy."
Offshore overnight
United States
US stocks scored solid gains as investors digested upbeat retail sales data and better-than-expected earnings from Citigroup.
Key numbers:
- S&P 500 added 0.80% to 1440.02
- Dow Jones Industrial Average added 0.71% at 13,423.99
- Nasdaq composite added 0.665 at 3064.18
Europe
European stock markets rebounded, on upbeat economic data from China and the chance of advances in the eurozone debt crisis, especially in Greece and Spain.
Key numbers:
- London’s benchmark FTSE 100 added 0.21% to 5805.61
- Frankfurt’s DAX 30 added 0.40% to 7261.25
- In Paris the CAC 40 added 0.92% to 3420.28
- Spain's IBEX 35 added 0.34 % to 7678.50
Asia
Asian markets were mixed following a soft lead from Wall Street, while better-than-expected Chinese trade data failed to lift spirits as dealers await growth figures from Beijing. With the corporate earnings season under way, there is also nervousness in global bourses, with many investors opting to stay away for now.
Key numbers:
- Japan's Nikkei 225 added 0.51% to 8,577.93
- Hong Kong's hang Seng was flat at 21,148.25
- China's Shangahi composite lost 0.30% to 2,098.70
How we fared yesterday
The sharemarket finished marginally lower, as the banks helped balance losses by the miners, who were weighed down by weaker commodity prices.
The benchmark S&P/ASX200 index slipped 3.2 points to 4483.4, while the broader All Ordinaries lost 4.6 points to 4505.5. Among the major sectors, materials lost 0.8 per cent, energy fell 0.4 per cent, but financials and consumer staples both gained 0.3 per cent.
BusinessDay with agencies