Strong offshore leads may boost Asian stocks; Coles winning supermarket war against Woolies?
City Index February 10, 2012 3:30 AM
<p>Asian stocks are expected to open higher today on the back of strong gains in the US and Europe overnight. Positive offshore leads should flow […]</p>
Asian stocks are expected to open higher today on the back of strong gains in the US and Europe overnight.
Positive offshore leads should flow through regional markets. The Dow Jones Industrial Average finished 0.7% higher while the S&P500, having seen the golden cross between the 50 and 200 day moving average, posted a respectable 0.9% rise. The Nasdaq was 1.2% higher and similar gains were booked in Europe.
In commodities, copper price bounced strongly, up to US$3.84/lb.
The Australian dollar last traded above 1.07 US cents, the Euro at 1.3165 against the US dollar. The dollar also saw weakness against the Japanese yen, and was last trading at 76.16.
Australian corporate news will be dominated by the second quarter sales figures from supermarket giant Coles, owned by ASX listed Wesfarmers. Following on from Woolworths’ second quarter released on Tuesday, Coles has today revealed its hand.
The fight between the two giants is focused on this area, for the time being. Coles has managed to book food and liquor comparable sales of 3.7% in the second quarter which compares with Woolworth’s 1.1%.
Coles said the rate of deflation increased from 1.8% in the first quarter to 2.4% in the second quarter. The magnitude of deflation reflects the intensity of the price war between the Coles and Woolworths and implies a very significant rise in volumes to Coles. Hence, on these numbers, Coles is no doubt winning customers from its main rival.
In other corporate news, mining giant BHP Biliton has confirmed board approval to deploy around US$917m for the construction of port expansion in Western Australia. The project will expand iron ore exports by a further 100m tonnes per year.