ASX poised to open lower following overnight weakness on Wall St

Stock Markets

Australian shares are set to open marginally lower today as US shares closed lower overnight. The benchmark S&P/ASX200 index closed higher yesterday, gaining 42.7 (+0.7%) points amid a volatile day of trading induced by corporate earnings and talks of rate cuts. Gains in consumer discretionary stocks and the big banks helped underpin yesterday’s rebound in the S&P/ASX200, with all the big four banks closing in positive territory.

European shares fell on Thursday, dragged down by several weak earnings updates following yesterday’s release which showed that euro zone factory output unexpectedly fell last month. The pan-European STOXX 600 index ended the day down 0.3 percent.

Wall Street’s main indices edged lower overnight, triggered by weak economic data and a drop-in energy and healthcare shares. The Commerce Department said new orders for key US-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth. The Dow Jones, S&P 500, and NASDAQ 100 closed down 103.81 (-0.40%), 9.82 (-0.35%), and 27.18 (-0.38%) points respectively.

Data released yesterday by the ABS showed that Australia’s jobless rate remained unchanged at 5% in January and showed a net increase of 39,100 persons with work.

ASX 200 futures are currently down 8.0 points. 

Today’s data releases: RBA governor Philip Lowe’s testimony to Parliament; NZ credit card spending January; Japan national CPI January; Euro zone IFO business climate February

Commodities and Currencies

Brent and WTI crude are currently US$67.19 (+0.42%) and US$56.92 (-0.64%) per barrel respectively.  

Iron ore prices are down 1.5% to US$86.68 per tonne.

The spot price of gold is currently down 1.31% and is now hovering around US$1323.40.

The AUD is currently down 1.05% at US70.90¢ as Westpac slashed its expectations for economic growth with the bank predicting two cuts to the official interest rates this year and undoing recent gains in the local currency.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.