Local shares are poised to edge lower at the open after concerns about China, Greece and oil put overseas investors on the defensive.
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What you need2know:
• SPI futures down 14pts at 5270
• AUD at 83.08 US cents
• Late on Wall St, S&P 500 -0.2%, Dow -0.5, Nasdaq +0.3%
• In Europe, Euro Stoxx 50 -2.6%, FTSE -2.1%, CAC -2.6%, DAX -2.2%
• Spot gold up $US26.83 to $US1230.34 an ounce
• Brent oil up 18 US cents to $US66.37 per barrel
• Iron ore down 74 US cents, or 1.1 per cent, to $US69.06/tonne
What’s on today
December consumer sentiment, US October wholesale inventories, Japan fourth-quarter business survey index.
Stocks to watch
Energy companies and iron ore producers. Rio Tinto slid 1.2 per cent in London; BHP Billiton fell 1.6 per cent.
APA Group’s shareholders were bracing for the year’s second-largest equity raising on Tuesday night, in an effort to fund a $5.5 billion acquisition in Queensland.
Shaw Stockbroking has re-initiated coverage of Nick Scali with a “buy” recommendation and a 12-month price target of $3.20 a share.
Currencies
The yen gained the most versus the US dollar in 18 months on haven demand amid a plunge in global stock markets. Japan’s currency rose versus all of its 16 major peers amid speculation tighter lending rules in China may crimp worldwide economic growth.
Pressure is building on Russia’s central bank to support the rouble via a big rise in interest rates at this week’s policy meeting, as money markets price in sharply higher funding costs in the coming months. The bank, which so far has been powerless to stem the rouble’s slide, meets on Thursday and analysts predict a 100 basis-point rise in the key lending rate, taking it to 10.5 per cent.
Commodities
Anglo American, which is reviewing operations from Australia to Chile to boost profit, is considering writing down the value of its iron ore and coking coal assets including its flagship Minas Rio project.
Ore with 62 per cent content delivered to Qingdao, China, lost 1.1 per cent to $US69.06 a dry metric ton on Tuesday, according to data from Metal Bulletin.
Iron ore will average $US67 a metric ton next year, 24 per cent less than previously forecast, and $US65 in 2016, down 23 per cent, JPMorgan Chase & Co said in a new report. So far this year, it’s averaged $US98.82 a ton, according to data from Metal Bulletin Ltd. In 2017, prices will average $US69 a ton, 16 per cent less, the bank said.
Andrew J. Hall, the crude-oil trader who gained notoriety for a $US100 million pay package during the financial crisis, is leaving his post at a century-old commodities trading house by year-end to focus on his own hedge fund, people familiar with the matter said.
United States
The Dow and S&P 500 were down but well off the day’s lows in early afternoon trading on Tuesday, helped by gains in tech and energy shares, while the Nasdaq edged higher. All three indexes pared losses after midday, with the S&P 500 cutting its decline in half. Apple shares were up 0.7 per cent and among the biggest boosts to the S&P 500 and Nasdaq.
Shares of US telecom stocks led losses on the S&P 500 following concerns about an industry price war after Verizon Communications warned that promotions in its wireless business would bite into its fourth-quarter profit. The S&P telecom index was down 3.2 per cent while Verizon shares were down 4.2 per cent, the biggest drag on both the Dow and S&P 500.
Manufacturing revenue in the US is expected to rise by 5.6 per cent in 2015 from this year, the semi-annual forecast from The Institute for Supply Management said.
Europe
Europe’s main stock markets have closed down sharply on fresh political uncertainty in Greece.
Greek stocks plunged 12.8 per cent - the largest one-day drop in 27 years - after the government unexpectedly brought forward a high-stakes presidential vote. The move raised questions over the recovery plan for the country which nearly caused the breakup of the eurozone.
Shares in British grocer Tesco plunged after another profit warning, down 6.6 per cent after hitting their lowest in nearly 15 years. Tesco slashed its full-year outlook by almost a third in the latest downgrade, triggered by an accounting scandal and intense competition in its home market. The European retail index fell 2 per cent.
What happened yesterday
Local stocks dived nearly 1.7 per cent on Tuesday, led down by a rout in the energy sector as the oil price tumbled again and pushed mining giant BHP Billiton to a five-year low. The All Ordinaries dropped 1.7 per cent to 5258.30 while the ASX 200 fell 1.7 per cent to 5282.69.