Markets Live: Chinese data weighs on stocks
August 9, 2012
These are goldilocks jobs numbers - not too hot, not too cold.
5.03pm: Our live coverage of the markets is now ending. Thanks everyone for reading this blog and posting your comments - we'll be back tomorrow morning at 9.30am.
For a wrap of today's session, click here.
Advertisement
4.39pm: The following Chinese data was released today:
• Consumer prices rose 1.8% yoy (1.7% expected)
• Producer prices fell 2.9% yoy (2.5% fall tipped)
• Industrial production rose 9.2% yoy (9.7% tipped)
• Retail sales grew 13.1% yoy (13.5% predicted)
4.33pm: Despite the late local turnaround after weak Chinese data, European stock futures are up, indicating the region’s equities will gain for a fifth day.
Futures on the Euro Stoxx 50 Index expiring in September have added 0.6 per cent. Contracts on the UK’s FTSE 100 Index and on Germany's DAX have both increased about 0.4 per cent.
S&P 500 Index futures rose 0.3 per cent.
4.21pm: The Australian dollar hit a 4-1/2 month high today after a robust jobs report prompted investors to widen the odds of further cuts in interest rates, but gains were trimmed in late trade after weak Chinese data offered fresh evidence the world's second biggest economy is slowing.
The dollar rose as high as $US1.0615 before retreating somewhat to recently trade at $US1.0595.
"The jobs data will provide another degree of comfort for the Reserve Bank. An array of indicators has suggested that activity levels have bottomed out and showing modest signs of improving," says Savanth Sebastian, an economist at CommSec.
Sebastian, however, says that further rate cuts remain on the card with worries about the eurozone debt crisis and a hard landing for China still festering in the background.
Interbank futures are not fully priced for a 25 basis-point cut until November. Overnight index swaps, which essentially plot where the market thinks the cash rate is heading, now imply rates of 3.13 per cent in 12 months, compared to 2.5 per cent as recently as June.
4.14pm: Strong rises in the materials sector, which ended 1.4 per cent higher, and among energy stocks (plus 0.9 per cent) failed to outweigh falls in financials (-0.5%), telcos (-2.2%) and among consumer discretionary stocks (-1.4%).
4.12pm: The sharemarket has closed slightly lower, ending a three-day rally. The benchmark S&P/ASX200 index slipped 4.3 points, or 0.1 per cent, to 4308.3, while the broader All Ords fell 2.8 points, or 0.1 per cent, to 4330.1.
4.04pm: As the market settles, here's what CMC Markets' Ben Taylor makes of today's session:
• After three days of solid gains the market seems to be slowly running out of steam. The better than expected Aussie job numbers helped to consolidate this week’s gains while our mining sectors recent underperformance gap is starting to be closed.
• The only real beneficiary of today’s stronger than expected Australian jobs figures was the Aussie dollar which sent the risk currency skyward above 1.06.
• The jobs data confirms the RBA’s assessment of the Australian economy and suggests to me that no further rate cut will be evident before the end of the year unless European factors deteriorate more than expected.
• As we now sit at the top end of the recent Aussie 200 range, I believe we will see a break above this range in the coming months as our miners play catch up to Australian bank out performance.
3.54pm: The weakish Chinese data has put pressure on the local sharemarket, which has just slipped into the red. The dollar has retreated back below $US1.06 and was recently trading around $US1.0590.
3.48pm: More economic data has been released in China and like this morning's inflation numbers they offer further signs of weakness in the economy of Australia's biggest trading partner.
Industrial production rose 9.2 per cent in July from last year, down from an annual growth rate of 9.5 per cent in June and lower than the 9.8 per cent economists were expecting.
Year-on-year retail sales growth also eased somewhat to 13.1 per cent, from 13.7 per cent in June. Excpectations had been for 13.5 per cent growth.
3.45pm: Whether for modesty, camouflage or sheer laziness, the Australian arm of French giant Suez Environnement calls itself a "small proprietary company", Michael West notes in Full compliance is no petitesse:
That its Antipodean activities, which include the large and distressed Melbourne desalination plant, make Suez the largest PPP contractor in this country must not suit Suez’s laissez-faire approach to complying with local laws and customs.
Of course, Suez is by no means alone when it comes to this attitude cavaliere towards compliance. As revealed here over the past few months, the likes of G4S, Veolia and immigration detention mob Serco – foreign multinationals all with big government contracts in this post-colonial outpost - hardly bother either.
Suez's efforts to quietly downplay its existence in this country, in a public reporting sense at least, were shattered by the loud outcry over the desal plant and the ensuing furore over PPPs (public private partnerships).
3.40pm: The drop in Chinese consumer inflation to 1.8 per cent has also contributed to rising regional sharemarkets, with investors speculating the lower number leaves room for more policy easing to support growth.
"This number gives more room for policy easing. It is now pretty clear that CPI will likely be below the official 4 per cent target for the year, so the policy focus for the government can stay clearly on growth," says Zhang Zhiwei, chief China economist at Nomura in Hong Kong.
3.28pm: The long-haul arm of budget carrier AirAsia says it will add six leased aircraft to its fleet as it pushes to build up its presence in the Asian region.
AirAsia X will lease the six Airbus A330-300s from the US-based International Lease Finance Corp in a deal worth approximately $US500 million.
"We intend to deploy the additional capacity with a vision to solidify our positions in our identified core markets including Australia, China, Taiwan, Korea and Japan," AirAsia X CEO Azran Osman-Rani said in a statement.
3.18pm: Here are five things you need to know about today's jobs data.
3.05pm: Bendigo and Adelaide Bank has sold its 7.8 per cent stake in listed wealth management firm IOOF for $110 million.
The rural bank says its earnings for the year to June 30 would receive a $40 million boost from the sale.
Bendigo managing director Mike Hirst says the sale followed a strategic review of its investments but that the working relationship between the two companies would remain strong.
2.55pm: The Commonwealth Bank says its acquisition of BankWest saved the Australian economy from a major financial shock during the global downturn.
CBA group executive David Cohen has told an inquiry in the company’s financial strength allowed it to acquire BankWest in 2008 from its UK-based parent HBOS plc.
‘‘That acquisition proves significant in maintaining public and investor confidence in the stability of the Australian financial system,’’ Mr Cohen told the senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.
‘‘While some commentators have pointed to the acquisition price of approximately $2 billion as ‘a bargain’, what is less well recognised is that CBA also had to source $17 billion to replace BankWest’s funding liabilities."
2.49pm: Treasurer Wayne Swan says the latest jobs numbers are another factor that puts Australia’s economy in a ‘‘league of its own’’.
‘‘Today’s figures shine more light on Australia’s strong set of economic fundamentals, which put our economy in a league of its own,’’ he says.
‘‘Australia’s outstanding economic record stands in stark contrast to many developed economies, which continue to experience weak or negative growth and stubbornly high unemployment levels.’’
2.25pm: Stocks are also rising across the region: Hong Kong stocks are up 0.82 per cent, with the benchmark Hang Seng Index gaining 165.35 points to 20,230.87.
Shanghai stocks are up 0.4 per cent and South Korean stocks are up 1.4 per cent.
2.11pm: Tokyo stocks have risen 1 per cent after the Bank of Japan stuck to its view that the economy is picking up moderately and held off further easing measures.
As afternoon trading starts, the bank has also announced it will leave interest rates unchanged at between zero and 0.1 per cent while holding steady on a 70-trillion-yen asset purchase programme, its key policy tool.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange is up 1.04 per cent or 92.57 points at 8973.73, while the broader Topix index of all first-section shares has gained 0.59 per cent, or 4.52 points, to 750.22.
1.56pm: Regis Resources' $150 million deal to buy the McPhillamys gold resource in western NSW has lifted the company's shares nearly 3 per cent, after the deal won quick endorsement from at least one analyst.
The shares are up 13 cents to $4.67 but Deutsche Bank has a $4.85 target price on the stock, which it rates a "buy".
‘‘This sees Newmont's share of Regis go from 16 per cent to circa 19 per cent,’’ Deutsche Bank said in a note to clients this afternoon. ‘‘This puts an end to speculation as to how Regis will take advantage of its share price premium in the current market.
‘‘The project represents a strong growth option beyond Duketon (albeit long-dated), and we back management to develop and deliver another open pit mine.’’
This analyst said the ‘‘buy’’ on Regis reflects the quality of management, the company's growth profile and its low risk operations.
Alkane shares were up 4 per cent.
1.45pm: The market has trimmed some of its gains but is still being buoyed by the mining sector.
‘‘Resources had a much needed shot in the arm - they’re enjoying a sunny day," RBS Market private client adviser Bill Bishop says.
1.29pm: Tabcorp shares are down nearly 4 per cent despite the company meeting earnings expectations with an underlying profit of $340 million for the financial year.
Deutsche Bank gaming analyst Mark Wilson says that while the result is solid there are negatives ahead.
$17 million of corporate and IT overhead need to be allocated across the remaining business when its poker machine licence expires next year. The company also indicated pro-forma wagering earnings of $150 million compared to Deutsche estimates of $190 million for the 2014 financial year.
1.20pm: An executive of Gina Rinehart’s Hancock Prospecting has criticised the federal government’s ‘‘class war’’ on big business as he accepted an industry award.
Hancock Prospecting chief development officer John Klepec picked up the Dealer of the Year Award on the company’s behalf at the annual Diggers and Dealers mining conference in Kalgoorlie. In his speech he said the federal government’s policy towards business had been delivered to the Australian public ‘‘draped in a smoke screen of old-style class war antagonism ... especially the mining sector and its leaders such as Mrs Rinehart’’.
‘‘As Mrs Rinehart says, it is time to stop the smoke screen of this divisive class warfare and get on with building projects to help Australia get out of its record debt,’’ he told delegates last night. ‘‘Let’s get back to our roots, the roots that built this country and enabled jobs and revenue and opportunities.’’
Read more: http://www.smh.com.au/business/markets-live/markets-live-chinese-data-weighs-on-stocks-20120809-23vj1.html#ixzz2jMVwTCpc
These are goldilocks jobs numbers - not too hot, not too cold.
5.03pm: Our live coverage of the markets is now ending. Thanks everyone for reading this blog and posting your comments - we'll be back tomorrow morning at 9.30am.
For a wrap of today's session, click here.
Advertisement
4.39pm: The following Chinese data was released today:
• Consumer prices rose 1.8% yoy (1.7% expected)
• Producer prices fell 2.9% yoy (2.5% fall tipped)
• Industrial production rose 9.2% yoy (9.7% tipped)
• Retail sales grew 13.1% yoy (13.5% predicted)
4.33pm: Despite the late local turnaround after weak Chinese data, European stock futures are up, indicating the region’s equities will gain for a fifth day.
Futures on the Euro Stoxx 50 Index expiring in September have added 0.6 per cent. Contracts on the UK’s FTSE 100 Index and on Germany's DAX have both increased about 0.4 per cent.
S&P 500 Index futures rose 0.3 per cent.
4.21pm: The Australian dollar hit a 4-1/2 month high today after a robust jobs report prompted investors to widen the odds of further cuts in interest rates, but gains were trimmed in late trade after weak Chinese data offered fresh evidence the world's second biggest economy is slowing.
The dollar rose as high as $US1.0615 before retreating somewhat to recently trade at $US1.0595.
"The jobs data will provide another degree of comfort for the Reserve Bank. An array of indicators has suggested that activity levels have bottomed out and showing modest signs of improving," says Savanth Sebastian, an economist at CommSec.
Sebastian, however, says that further rate cuts remain on the card with worries about the eurozone debt crisis and a hard landing for China still festering in the background.
Interbank futures are not fully priced for a 25 basis-point cut until November. Overnight index swaps, which essentially plot where the market thinks the cash rate is heading, now imply rates of 3.13 per cent in 12 months, compared to 2.5 per cent as recently as June.
4.14pm: Strong rises in the materials sector, which ended 1.4 per cent higher, and among energy stocks (plus 0.9 per cent) failed to outweigh falls in financials (-0.5%), telcos (-2.2%) and among consumer discretionary stocks (-1.4%).
4.12pm: The sharemarket has closed slightly lower, ending a three-day rally. The benchmark S&P/ASX200 index slipped 4.3 points, or 0.1 per cent, to 4308.3, while the broader All Ords fell 2.8 points, or 0.1 per cent, to 4330.1.
4.04pm: As the market settles, here's what CMC Markets' Ben Taylor makes of today's session:
• After three days of solid gains the market seems to be slowly running out of steam. The better than expected Aussie job numbers helped to consolidate this week’s gains while our mining sectors recent underperformance gap is starting to be closed.
• The only real beneficiary of today’s stronger than expected Australian jobs figures was the Aussie dollar which sent the risk currency skyward above 1.06.
• The jobs data confirms the RBA’s assessment of the Australian economy and suggests to me that no further rate cut will be evident before the end of the year unless European factors deteriorate more than expected.
• As we now sit at the top end of the recent Aussie 200 range, I believe we will see a break above this range in the coming months as our miners play catch up to Australian bank out performance.
3.54pm: The weakish Chinese data has put pressure on the local sharemarket, which has just slipped into the red. The dollar has retreated back below $US1.06 and was recently trading around $US1.0590.
3.48pm: More economic data has been released in China and like this morning's inflation numbers they offer further signs of weakness in the economy of Australia's biggest trading partner.
Industrial production rose 9.2 per cent in July from last year, down from an annual growth rate of 9.5 per cent in June and lower than the 9.8 per cent economists were expecting.
Year-on-year retail sales growth also eased somewhat to 13.1 per cent, from 13.7 per cent in June. Excpectations had been for 13.5 per cent growth.
3.45pm: Whether for modesty, camouflage or sheer laziness, the Australian arm of French giant Suez Environnement calls itself a "small proprietary company", Michael West notes in Full compliance is no petitesse:
That its Antipodean activities, which include the large and distressed Melbourne desalination plant, make Suez the largest PPP contractor in this country must not suit Suez’s laissez-faire approach to complying with local laws and customs.
Of course, Suez is by no means alone when it comes to this attitude cavaliere towards compliance. As revealed here over the past few months, the likes of G4S, Veolia and immigration detention mob Serco – foreign multinationals all with big government contracts in this post-colonial outpost - hardly bother either.
Suez's efforts to quietly downplay its existence in this country, in a public reporting sense at least, were shattered by the loud outcry over the desal plant and the ensuing furore over PPPs (public private partnerships).
3.40pm: The drop in Chinese consumer inflation to 1.8 per cent has also contributed to rising regional sharemarkets, with investors speculating the lower number leaves room for more policy easing to support growth.
"This number gives more room for policy easing. It is now pretty clear that CPI will likely be below the official 4 per cent target for the year, so the policy focus for the government can stay clearly on growth," says Zhang Zhiwei, chief China economist at Nomura in Hong Kong.
3.28pm: The long-haul arm of budget carrier AirAsia says it will add six leased aircraft to its fleet as it pushes to build up its presence in the Asian region.
AirAsia X will lease the six Airbus A330-300s from the US-based International Lease Finance Corp in a deal worth approximately $US500 million.
"We intend to deploy the additional capacity with a vision to solidify our positions in our identified core markets including Australia, China, Taiwan, Korea and Japan," AirAsia X CEO Azran Osman-Rani said in a statement.
3.18pm: Here are five things you need to know about today's jobs data.
3.05pm: Bendigo and Adelaide Bank has sold its 7.8 per cent stake in listed wealth management firm IOOF for $110 million.
The rural bank says its earnings for the year to June 30 would receive a $40 million boost from the sale.
Bendigo managing director Mike Hirst says the sale followed a strategic review of its investments but that the working relationship between the two companies would remain strong.
2.55pm: The Commonwealth Bank says its acquisition of BankWest saved the Australian economy from a major financial shock during the global downturn.
CBA group executive David Cohen has told an inquiry in the company’s financial strength allowed it to acquire BankWest in 2008 from its UK-based parent HBOS plc.
‘‘That acquisition proves significant in maintaining public and investor confidence in the stability of the Australian financial system,’’ Mr Cohen told the senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.
‘‘While some commentators have pointed to the acquisition price of approximately $2 billion as ‘a bargain’, what is less well recognised is that CBA also had to source $17 billion to replace BankWest’s funding liabilities."
2.49pm: Treasurer Wayne Swan says the latest jobs numbers are another factor that puts Australia’s economy in a ‘‘league of its own’’.
‘‘Today’s figures shine more light on Australia’s strong set of economic fundamentals, which put our economy in a league of its own,’’ he says.
‘‘Australia’s outstanding economic record stands in stark contrast to many developed economies, which continue to experience weak or negative growth and stubbornly high unemployment levels.’’
2.25pm: Stocks are also rising across the region: Hong Kong stocks are up 0.82 per cent, with the benchmark Hang Seng Index gaining 165.35 points to 20,230.87.
Shanghai stocks are up 0.4 per cent and South Korean stocks are up 1.4 per cent.
2.11pm: Tokyo stocks have risen 1 per cent after the Bank of Japan stuck to its view that the economy is picking up moderately and held off further easing measures.
As afternoon trading starts, the bank has also announced it will leave interest rates unchanged at between zero and 0.1 per cent while holding steady on a 70-trillion-yen asset purchase programme, its key policy tool.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange is up 1.04 per cent or 92.57 points at 8973.73, while the broader Topix index of all first-section shares has gained 0.59 per cent, or 4.52 points, to 750.22.
1.56pm: Regis Resources' $150 million deal to buy the McPhillamys gold resource in western NSW has lifted the company's shares nearly 3 per cent, after the deal won quick endorsement from at least one analyst.
The shares are up 13 cents to $4.67 but Deutsche Bank has a $4.85 target price on the stock, which it rates a "buy".
‘‘This sees Newmont's share of Regis go from 16 per cent to circa 19 per cent,’’ Deutsche Bank said in a note to clients this afternoon. ‘‘This puts an end to speculation as to how Regis will take advantage of its share price premium in the current market.
‘‘The project represents a strong growth option beyond Duketon (albeit long-dated), and we back management to develop and deliver another open pit mine.’’
This analyst said the ‘‘buy’’ on Regis reflects the quality of management, the company's growth profile and its low risk operations.
Alkane shares were up 4 per cent.
1.45pm: The market has trimmed some of its gains but is still being buoyed by the mining sector.
‘‘Resources had a much needed shot in the arm - they’re enjoying a sunny day," RBS Market private client adviser Bill Bishop says.
1.29pm: Tabcorp shares are down nearly 4 per cent despite the company meeting earnings expectations with an underlying profit of $340 million for the financial year.
Deutsche Bank gaming analyst Mark Wilson says that while the result is solid there are negatives ahead.
$17 million of corporate and IT overhead need to be allocated across the remaining business when its poker machine licence expires next year. The company also indicated pro-forma wagering earnings of $150 million compared to Deutsche estimates of $190 million for the 2014 financial year.
1.20pm: An executive of Gina Rinehart’s Hancock Prospecting has criticised the federal government’s ‘‘class war’’ on big business as he accepted an industry award.
Hancock Prospecting chief development officer John Klepec picked up the Dealer of the Year Award on the company’s behalf at the annual Diggers and Dealers mining conference in Kalgoorlie. In his speech he said the federal government’s policy towards business had been delivered to the Australian public ‘‘draped in a smoke screen of old-style class war antagonism ... especially the mining sector and its leaders such as Mrs Rinehart’’.
‘‘As Mrs Rinehart says, it is time to stop the smoke screen of this divisive class warfare and get on with building projects to help Australia get out of its record debt,’’ he told delegates last night. ‘‘Let’s get back to our roots, the roots that built this country and enabled jobs and revenue and opportunities.’’
Read more: http://www.smh.com.au/business/markets-live/markets-live-chinese-data-weighs-on-stocks-20120809-23vj1.html#ixzz2jMVwTCpc
