CMC Markets – Evening Update 07/01/13

By David Fiander
Equities Risk Manager
CMC Markets Singapore

Asian equity markets were in a less than buoyant mood today as most the regional indices posted losses. Markets were lined up to open stronger today, following the lead from the U.S on Friday night where the S&P 500 climbed 0.5%, to 1,466.47, its highest closing level since Dec. 31, 2007. These gains were attributed to reports from the Labour Department where non-farm payrolls rose by 155,000 in December and the jobless rate stood at 7.8% which was pretty much in line with analyst expectations however indicates the U.S economy is continuing its snail’s pace recovery.

In Australia the benchmark ASX200 index was 0.14% lower at 4,717.3, as the market was weight down by the big miners today with BHP down 0.26% and Rio Tinto down 1.68%. The big news story was Whitehaven Coal which lost over $276 million in market value after falling victim to a hoax media release. They managed to recover most of these losses however still closed down 0.6%, the corporate watchdog are now investigating to see if any laws were broken. Shares in rare earths miner Lynas jumped over 14% after the company announced it expects to be producing finished products from its controversial plant in Malaysia within a matter of weeks.

After seeing its best one-day percentage performance since March 2011 on Friday, the Nikkei index gave some of those gains today closing down 0.8%. Mazda Motor Corp dropped 2.7% after trading more than 1% higher earlier in the day, while Fujitsu Ltd. lost 5.4%, and Sharp Corp. dropped 4.4% In Hong Kong markets traded in an non directional manner today as the Hang Seng swung from gains to losses. The index managed to close down 0.1% with Bank of China Ltd. down 0.6% and Agricultural Bank of China finishing the day lower by 0.8%.

The local Singapore market fared little better as the Strait Times finished the day flat after giving back
its early gains. Commodities company Noble Group were among today’s best preforming stocks, jumping over 3% after a local broking house report the company could have better earnings for its fourth quarter on the back of stronger commodity prices.

U.S Crude oil pulled back over 30 cent today to trade around the $92.70 a barrel level, the falls came as inventory data on Friday indicated weakening in fuel demand.

Gold was stronger in early trade today, pushing back up to around $1,663/oz before erasing the early gains and finishing little changed. Last read it was sitting at 1,655/oz.

There is little in the way of economic data to keep markets interested for the next few days. Tomorrow there is Trade balance data due out of Australia which could be interesting considering their reliance on external trade, and these is Chinese Trade balance, PPI and CPI due later this week but most people are now looking forward to the looming reporting seasons. Equity markets have had substantial rallies in recent times and if company reports and outlooks for the future due not stack up to the optimism markets have already priced in we could see a pull back.