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CMC Markets – Evening Update 05/11/12

By Donal Wee
Business Operations Analyst
CMC Markets Singapore

Asian markets traded mostly in the red today as the U.S presidential elections, not to mention the change of government in China come firmly into view this week. Trade volumes were well below their daily average across the region as markets followed the negative lead from the U.S on Friday night.

Despite a better than estimated jobs number the Dow Jones and S&P 500 fell to just under 1% each. Non-Farm Payroll data in the US showed 171,000 jobs were added in October, beating analyst estimates of 125,000 however this was not enough to stop the employment rate moving to 7.9% from 7.8%, as was expected.

The U.S presidential elections will not only be the big talking point this week as we sees China’s Communist Party kicks off its 18th Congress on Wednesday as 2,270 delegates meet over the next several days to pick a new leader with many widely expecting Xi Jinping to replace Hu Jintao as general secretary of the party that’s ruled China since 1949.

Australia’s ASX 200 was todays only gainer as it closed up 0.3% in what was a choppy day of trading. The miners were among the strongest performers for the second straight trading session in a row as BHP Billiton shares gaining 1.16% & Rio Tinto up 2.6%.

Also catching the headlines today was Australia’s retail sales figure rising by 0.5% for the month of September from August when they edged up by 0.3%. The increase was fractionally above forecasts of a 0.4% gain, yet inflation adjusted sales for the 3rd quarter still dropped 0.1% due to weakness seen back in July. Japan’s Nikkei lost 0.5% as the index capped its 3 day advance.

Hong Kong’s Hang Seng dropped 0.35% from its highest close this year. Despite the drops seen across the broader market the main talking point today was shares in smart phone maker Foxconn International Holdings, as it jumped more than 30% after a brokerage reports said the company is due to start making Apple iPhones.

Singapore’s Straits Times Index followed the rest of the regional indices as it dropped 0.25% today. Singapore Airlines was among todays under performers after reporting a 54% drop in its 2nd-quarter net profits; the stock was down as much as 1.3%. Sembcorp Marine Ltd.

fell 0.2% ahead of its third-quarter earnings report due out later today. Shipbuilder COSCO Corp also managed to rise as much as 1.2%, despite 3rd quarter results missing analysts’ expectations.

Gold was pretty flat in today’s session as the precious metal traded around the $1680.10 an ounce level. Gold took a rest after it dumping more than $40 an ounce on Friday to mark their 4th weekly loss in a row after the release of better than expected nonfarm payrolls figures, providing a further boost to the U.S. dollar.

For the week everyone’s attention will be following the lead up to the U.S presidential election on Tuesday night in what is sure to be a photo finish between Obama and Romney however first we will kick off tomorrow with Australia’s Cash Rate decision with a poll of 15 out of 20 economists expecting a cut in the reserve rate. Rounding out the week we will see China’s CPI & PPI figures on Friday.