Asian stocks mostly higher; Australia registers a healthy GDP growth
City Index June 6, 2012 5:40 PM
<p>Asian stocks are set for a modest start, perhaps slightly positive thanks to offshore leads overnight. US stocks gained as an increase in the services […]</p>
Asian stocks are set for a modest start, perhaps slightly positive thanks to offshore leads overnight.
US stocks gained as an increase in the services industry offset concerns that the world’s largest economy was slowing into a recession. Reports that Europe was preparing a credit line for Spain also helped improve sentiment.
The S&P500 finished the session 0.6% higher while the Euro was last trading at 124.52 US cents.
The Australian dollar was flat on yesterday’s levels which saw a rally following a decision by the Australian central bank to cut interest rates by 25 basis points. The Aussie dollar was last trading at 97.53 US cents. The dollar yen was also flat on yesterday afternoon’s levels Asian time, last at 78.71.
The one indicator that could temper Asian gains today is the copper price which remains slightly below US$3.30/lb. The bounce from these levels has not been completely convincing and a breach below may indicate overall sentiment towards other industrial commodities and the Chinese growth story in general.
In the absence of an actual Chinese monetary or fiscal stimulus package, copper would stay near current levels and drag down materials stocks with it.
This is important for the Asian regional indices. Australia’s largest index constituent for example, by a large factor, is BHP Billiton which as of yesterday’s close is down 31% from its 52 week high.
In regional corporate news, Chinese stocks traded in New York advanced for the first time in five days, with China Eastern Airlines leading gains, on prospects measures to boost consumer spending in Asia’s largest economy will stimulate growth.
In Australian corporate news, the media space remains an out of favour among investors, perhaps dented even further by Ten Network Holding’s announcement this morning that it is seeking to raise A$200m an all time low price of A$0.51 per share.
This comes as listed peer Fairfax Media trades at record low levels, as of yesterday’s close, a market capitalisation of A$1.3 billion.
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