IG Markets: Morning Prices

On Wall Street on Friday, stocks snapped their three session losing streak on light volumes as concerns over tensions in the Middle East and Northern Africa stabilised. Crude Oil prices also stabilised, providing some confidence to markets that the surging price won’t derail the economic recovery.

The technology-laden NASDAQ was the best performer, jumping 1.6% while the broad-based S&P 500 rose 1.1% and the Dow Jones Industrial Average 0.5%.

Locally, the ASX 200 is called to open the session 0.2% higher at 4847 following the encouraging night of trade in the US. Gains were widespread and should see a solid performance across the board to start the week down under.

The commodity-based sectors are likely to lead the index north after the energy and materials sectors were the leaders on Wall Street; they added 1.6% and 1.5% respectively. Crude Oil prices rose a modest 0.4% and closed the session at US$98.23/barrel.

In the materials space, leads were very positive with base metals on the London Metals Exchange all higher between 0.7% and 2.7%, with copper the top performer. In normal London equities trade, Rio Tinto and BHP Billiton had very strong sessions as well, adding 2.3% and 3.1% respectively. Not surprisingly, BHP Billiton’s ADR is calling the locally listed stock to open 0.4% stronger at $46.14.

Gold names should be well-supported as the precious metal rose 0.3% to US$1410.60/oz; with news sources suggesting a struggle for Libyan capital Tripoli isn’t far away, safe haven assets are likely to remain well bid.
A couple of stocks to watch today will be rare-earths darling Lynas Corp and Fortescue Metals Group ; comments over the weekend from Japan that it is looking to cut approximately 30% usage of rare earths could see some volatility in the stock. As for Fortescue, its announcement late on Friday that it had discovered 1b tonnes of high grade iron ore near its Cloudbreak deposit should see solid buying support today.

Financial (1.4%) and consumer discretionary (1%) sectors also had strong sessions and should provide a level of support for local names.

In summary, it looks like we’re set for a positive start to the new trading week, with those sectors leveraged to commodities likely to lead the way. On the economic calendar, the major release for the session will be the latest read on private sector credit, which is due at 11.30am. The reporting season starts to wind down today; the only two majors due to report are QBE Insurance Group and Downer EDI, with the latter expected to announce a significant capital raising.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0145 0.0012 0.12%
ASX (cash) 4847 11 0.22%
US DOW (cash) 12121 26 0.21%
US S&P (cash) 1320.1 9 0.70%
UK FTSE (cash) 6013 83 1.40%
German DAX (cash) 7188 48 0.68%
Japan 225 (cash) 10545 19 0.18%
Rio Tinto Plc (London) 42.66 0.95 2.29%
BHP Billiton Plc (London) 24.33 0.72 3.07%
BHP Billiton Ltd. ADR (US) (AUD) 46.14 0.19 0.41%
US Light Crude Oil (Apr) 98.23 0.41 0.42%
Gold (spot) 1410.6 4.55 0.32%
Aluminium (London) 2565.00 24 0.94%
Copper (London) 9760.00 260 2.74%
Nickel (London) 28190.00 685 2.49%
Zinc (London) 2491.00 18 0.73%
RBA Cash Rate to be raised by 25bp (Mar) (%) 6.00 0 0.00%

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