Investors on edge ahead of release of Chinese quarterly economic growth data

Stock Markets

Australian shares are poised to open lower today ahead of the release of Chinese quarterly economic growth data. Earlier this year, investor concerns about global economic slowdown were raised by poor Chinese quarterly economic growth data. However, since then economic data releases from China have been more positive as authorities ramped up stimulus measures, largely quelling investor fears of global economic slowdown. The Federal Reserve reported that industrial production fell 0.1% in March, missing economists’ expectations for a 0.1% gain. As expected, the RBA’s April meeting minutes had a dovish tone and had no significant effect on the local sharemarket.

Wall Street’s major indexes closed in positive territory overnight, though gains were limited by concerns about the impact of US policy on the health care sector.  The Dow Jones, S&P 500 and NASDAQ 100 closed up 67.89 (+0.26%), 1.48 (+0.05%), and 24.213 (+0.30%) points respectively.  

The benchmark S&P/ASX200 index closed higher on Tuesday with the index rising 26 (+0.42%) points, bolstered by a flurry of positive quarterly earnings which offset losses from the energy sector. Health care was the best performing sector and was collectively up 1.27%, lifted by Cochlear which rose 7.86% to $180.76 after the hearing aid company debuted a new implant that doesn’t need to be removed during an MRI. Energy shares lost ground, with Caltex Australia down 2.52% and Beach Energy down 1.4%.

ASX 200 futures are currently down 17 points.

Today’s data releases:  WBC Leading Index March; NZ CPI Q1; China industrial production March; retail sales March and GDP Quarter 1; Euro zone trade balance February; Japan industrial production February; US CPI March, trade balance February and Federal Reserve Beige book.

Commodities and Currencies

Oil prices rose overnight, bolstered by concerns over tightening global supply as fighting in Libya continues amid falling Venezuelan and Iranian crude oil exports. However, gains were capped by uncertainty surrounding an OPEC-led production cut. Brent and WTI crude prices are currently sitting at US$71.72 (+0.76%) and US$64.34 (+0.45%).

Iron ore prices are down 0.7% at US$94.78 per tonne.

The spot price of gold is currently down 0.89% at US$1276.47.

The AUD is currently marginally down 0.25% at US71.57¢.

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.