Local shares are poised to fall to start the month amid further weakness on Wall Street after the latest round of economic data disappointed.
What you need2know:
• SPI futures down 27 pts at 5256
• AUD at 87.52 US cents, 95.99 Japanese yen, 69.30 Euro cents and 53.99 British pence.
• On Wall St, S&P 500 -0.1%, Dow -0.2%, Nasdaq -0.1%
• In Europe, Euro Stoxx 50 +1.2%, FTSE -0.4%, CAC +1.3%, DAX +0.6%
• Spot gold down 0.6% to $US1208.34 an ounce
• Iron ore slips 0.3% to $US77.50 per metric tonne
• Brent oil slumps 2.5% to $US94.90 per barrel
What’s on today
The Australian Industry Group performance of manufacturing (PMI) index for September, Australian Bureau of Statistics (ABS) retail trade for August
Stocks to watch
The following stocks will trade ex dividend today: Auckland International Airport, Ausdrill, CML Group, Cedar Woods Properties, Clime Capital, Ebos Group, Freedom Foods, Genesis Energy, Kew East Financial, Metlifecare, SMS Management and Tech, Sealink Travel.
RBC Capital Markets is maintaining an “outperform, speculative risk” recommendation and a $4.00 a share price target on Sirius Resources. “The stock has been oversold in response to the disappointing drill results regarding the deep EM conductor under Nova and Taipan."
Commonwealth Bank has a target price $2.85 a share and retains a “neutral” recommendation on Incitec Pivot.
Currencies
The external risks facing the Aussie, including the recent pick-up in volatility, will likely continue to weigh on the currency in the near-term, David de Ferranti, market analyst at FXCM, says. “If we can clear the 0.8660 barrier, traders will set their sights on the July 2010 low near 0.8320.”
The dollar index of major currencies rose 0.4 per cent to 85.954. The index has gained almost 8 per cent over the last three months, the biggest quarterly gain since 2008 and a record-breaking 11 successive weeks of gains.
Commodities
Commodities posted their biggest quarterly drop in three years on Tuesday as plummeting oil prices and lower markets from gold to copper to soybeans brought the third straight monthly decline to a sector pressured by a surging US dollar.
Oil's benchmark Brent crude fell to its lowest in more than two years. US crude slid nearly 4 per cent, its biggest daily decline since 2012.
Gold futures hit a 2014 low, the sharpest monthly slide since June 2013. Copper had its biggest monthly loss since March. Soybeans fell their most in a quarter since 2008.
"With end-of-quarter rebalancing, we've seen more selling triggered as investors change their allocations, and with the dollar's strength, commodities are getting sold across the board," said Amrita Sen at Energy Aspects in London.
The 19-commodity Thomson Reuters/Core Commodity CRB Index fell nearly 2 per cent on the day, 5 per cent on the month and 10 per cent on the quarter. It was the CRB's biggest quarterly loss since September 2011. The index has fallen every month since the end of June.
United States
US stocks slipped on Tuesday, dragged down by energy and materials shares as economic data disappointed, and major indexes posted losses for the month.
Consumer confidence fell in September for the first time in five months and home prices in July rose less than expected from a year earlier, underscoring the unsteady nature of US growth.
EBay’s shares rose as much as 8 per cent after the company said it would spin off PayPal as a publicly traded company in the second half of 2015, a transaction that will be tax-free to shareholders.
Europe
European shares mostly rose on Tuesday as a batch of weak inflation data increased the chances the European Central Bank will introduce new stimulus measures to boost the region’s flagging economy.
Euro zone inflation slowed to 0.3 per cent in September, in line with market forecasts, because of falling prices of unprocessed food and energy, according to a first estimate by the European Union’s statistics office.
Airbus has won European safety approval for the A350, clearing the main regulatory hurdle before its newest and most technically advanced jet can start flying passengers
What happened yesterday
The Australian sharemarket is trading below the level at which it started 2014, after a shocker month wiped out all the gains of the first eight months of the year.
The benchmark S&P/ASX200 Index and the broader All Ordinaries Index each lifted 0.5 per cent on Tuesday, to 5292.8 points and 5296.8 points respectively, as bargain hunters snapped up the big four banks that have all been heavily sold-off in recent weeks
