Stocks set for flat start despite weak leads

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Australian shares are expected to open flat despite modest falls on Wall Street on fiscal cliff concerns and European markets fell as the region slipped back into its second recession since 2009.

On the ASX24, the SPI futures contract was 3 point higher to 4353. The slide in the Aussie dollar continued. The local unit was recently buying $US1.0324, about 1.25 US cents since late Wednesday, and down from yesterday’s close of $US1.0355. It was also buying 83.81 yen, 80.86 euro cents and 65.16 pence.

What you need to knowThe SPI was 3 points higher at 4353The $A was trading at $US1.0324In late trade, the S&P500 was down 0.12% to 1353.87In Europe, the FTSE100 lost 0.77% to 5677.75China iron ore added 40 US cents to $US122.80Gold lost 0.9% to $US1713.80 an ounceWTI crude oil lost $US1.33 to $US84.99 a barrelRJ/CRB commodities index added 0.61% to 293.92

Making news today

There is no major economics news scheduled for today.

In company news:Vodafone Hutchison Australia chief executive Bill Morrow to address American Chamber of Commerce lunchThe following companies hold annual general meetings: Cash Converters, Goodman Group, Kathmandu Holdings, Wilson HTM Investment Group. Click here for a full list.

Analyst rating changes:QBE cut to ‘negative’ by A.M. BestCochlear cut to ‘underperform’ at Credit SuisseIluka cut to ‘underperform’ at MacquarieIress cut to ‘neutral’ from ‘buy’ at Goldman SachsCSR upgraded to ‘neutral’ from ‘buy’ at Goldman SachsSeven West Media raised to ‘buy at Duetsche Bank

The dollar

The Australian dollar is lower, after reports of large currency sales by the central bank and weak global market performances. At 7am AEDT, the local unit was trading at $US1.0329, down from $US1.0358.

Currency trader Stuart Ive said large sales of the Aussie dollar by the central bank plus weak performances on global markets had impacted the currency.

‘‘It’s a continuation of the trend we saw yesterday,’’ he said.

‘‘We had data from the RBA (Reserve Bank of Australia) showing that there’s been a significant outflow of Australian dollars.‘‘That added to a downward movement in the currency.

‘‘But we’ve also seen stock markets decline globally, as well as metal commodity markets.’’

Offshore overnight

Bonds

Italian 10-year bonds rose for a third day after a report showed the nation’s economy contracted less last quarter than analysts forecast. Italy’s government securities led gains in euro-area debt even as the data indicated the nation’s fourth recession since 2001 entered its second year. Italy’s 10-year bond yield dropped six basis points to 4.90%Spain’s two-year yield climbed one basis point to 3.25%Germany’s 10-year yield was little changed at 1.34%

US Treasuries fell, led by 30-year bonds, as the European Union’s endorsement of Spain’s deficit- cutting efforts boosted prospects the country will ask for a sovereign bailout, sapping demand for the safest assets.Ten-year yields climbed two basis points to 1.62%

United States

The S&P 500 was on track to fall for a third day on Thursday as Wal-Mart Stores Inc reported disappointing results and investors feared the “fiscal cliff” will harm the economy.  Stocks have struggled recently to hold onto even slight gains, dropping more than 1 percent on Wednesday after starting the session higher.

Key numbers:S&P500 lost 0.12% at 1353.80Dow Jones industrial average lost 0.23% at 12,541.88Nasdaq Composite Index lost 0.34% to 2837.27

Europe

Europe’s main stock markets have retreated following news the 17-nation eurozone economy fell into recession in the third quarter as a result of the region’s sovereign debt crisis.

Key numbers:London’s FTSE 100 lost 0.77% to 5677.75 In Frankfurt, the DAX 30 lost 0.82% to 7043.42 In Paris the CAC 40 lost 0.52% to 3382.40 

Asia

Asian stocks outside Japan slid toward a two-month low amid concern a budget standoff in the U.S. may curb global growth. Japanese shares gained on speculation a change of government may result in more action to stimulate the economy.

Key numbers:Japan’s Nikkei 225 added 1.9% to 8829.72Hong Kong’s Hang Seng lost 1.6% to 21108.93China’s Hangzhou Composite lost 1.2% to 2030.29

Commodities

Energy

Oil prices diverged as traders reacted to Middle East supply concerns and digest a batch of US economic data.Brent North Sea crude for delivery in December jumped $US1.14 to $US110.75 a barrel in late London deals on Thursday.New York’s main contract, light sweet crude for December, fell 43 cents to $US85.89 a barrel.

Precious metals

Gold prices dropped 0.9 per cent on signs that demand for the precious metal is sagging. Global gold demand fell 11 per cent during the third quarter compared to the previous year, the World Gold Council said.The most actively traded contract, for December delivery, fell $US16.30, or 0.9 per cent, to settle at $US1,713.80 a troy ounce on the Comex division of the New York Mercantile Exchange.

Base metals

Base metals on the London Metal Exchange (LME) closed in a mixture of positive and negative territory, but remain little changed on the day overall amid nervous trade.At the close of open-outcry trading on Thursday, LME three-month copper had drifted to close flat at $US7,639.50 a metric ton.

How we fared yesterday

The Australian stock market closed sharply lower following steep falls on Wall Street as investors fret about the US fiscal cliff.

At the close on Thursday, the benchmark S&P/ASX200 index was down 39.2 points, or 0.9 per cent, at 4349.2, while the broader All Ordinaries index was down 40.1 points, or 0.9 per cent, at 4370.6.

BusinessDay with agencies

The original release of this article first appeared on the website of Hangzhou Night Net.

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