IG Markets - Morning thoughts and opening prices 28/2/12

IG Markets - Morning thoughts and opening prices

In US trade, markets shrugged off early selling to finish the session relatively flat on the back of a surprise jump in US pending home sales and a near 1.0% move lower in the crude oil price. The S&P traded to major resistance at 1,370 at one stage during the session, after having being down 0.80% in early trading following the weak lead from Europe.

Among the major averages, the Dow Jones Industrial Average was flat at 12982. The S&P was 0.1% higher at 1368 and the NASDAQ also climbed 0.1% to finish at 2966. This was the S&P’s highest close since mid-2008. European markets were weaker after the German Parliament’s vote for the second Greek bailout easily passed, but some resistance within Merkel's own party prevented the vote getting a ‘Chancellor's majority’.

The pullback in oil prices will give some much needed relief to investors who fear high oil prices will cripple the global economic recovery. Oil broke its seven-day winning streak but remains at nine-month highs. Despite the fall in oil prices, there was a significant recovery in risk sentiment, with most risk assets enjoying a bounce from their lows. The stronger-than-expected US pending home sales data helped to support copper and other base metals.

Ahead of the open, we are calling the Aussie market a touch higher at 4269. We could see some upside to this call, given the upside momentum towards the end of the US session. Yesterday’s drop was led by the materials sectors, with the miners particularly soft. As a result, we would not be surprised to see the miners lead the gains today, given the improvement in risk sentiment. BHP’s ADR is pointing to a 1.3% gain at the open. On the reporting end, QBE Insurance, Aristocrat Leisure and Harvey Norman are the major names to look out for. There is nothing to keep watch of on the economic calendar.

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

Please contact IG Markets if you require market commentary or the latest dealing price.

ENDS

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