ASX set for steady start despite offshore gains - Sydney Morning Herald

• Join the Markets Live blog from 9.30am

Australian shares are set for a steady start after the Dow Jones industrial average hit a five-year high on strong earnings reports and Euro markets closed higher.

The SPI futures contract was 3 points higher to 4857. The Aussie dollar was higher at $US1.0462, up from $US1.0444 late yesterday. It was down from close to a four-year peak against the yen at 94.87 yen. The local unit was also buying 77.58 euro cents and 66.4 pence.

Wesfarmers, owner of Coles, Bunnings, Target and Kmart, today reports its second-quarter sales performance. Market leader Woolworths, which also owns Big W, will unveil its sales numbers tomorrow. Coles is again expected to outgrow larger rival Woolworths, notching up growth of around 4 per cent against 2.8 per cent for Woolies.

Meanwhile in the US, the Federal Reserve has begun a two-day policy meeting in which it is expected to maintain its easy monetary policy.

What you need to know

• SPI futures are 3 points higher at 4857


• The $A is higher at $US1.0462


• In recent trade in New York, the S&P500 was 0.43% higher at 1506.69


• In Europe, the FTSE100 rose 0.71% to 6339.19


• China iron ore was flat at $US148.40 a metric tonne


• Gold rose 0.5% to $US1660.80 an ounce


• WTI crude oil added 0.9% to $97.28 a barrel


• Reuters/Jefferies CRB index added 0.55% to 301.83

Making news today

There is no major economics news scheduled for today.

In company news:

• Wesfarmers releases its second quarter sales results


• First day of the two-day Hastie Group second creditors' meetings in Melbourne, Sydney, Perth, Adelaide


• Australian Property Institute releases its residential property outlook for 2013

Analyst rating changes:

• JB Hi-Fi cut to underperform from neutral at Bank of America-Merrill Lynch


• Goodman Fielder raised to buy at Bank of America-Merrill Lynch

The dollar

The Australian dollar is higher after international investors welcomed news of a surge in domestic business confidence. At 7.25 AEDT, the currency was trading at $US1.0462, up from $US1.0452 on Tuesday afternoon.

The Australian dollar gained ground during Tuesday’s local session after the National Australia Bank’s monthly business survey showed an unexpected rise in business confidence in December.

Easy Forex currency dealer Anthony Botros said the survey results helped boost the currency during the US and European sessions on Tuesday night.

‘‘The business confidence numbers yesterday helped prop up the Aussie dollar,’’ he said. Mr Botros said the Australian dollar also benefited from a stronger euro.

‘‘Ongoing improving sentiment in the euro zone dragged the euro dollar up to a 14-month high, so it does seem that the Aussie dollar was subject to a bit of flow-driven optimism,’’ he said. Mr Botros said that, with no major economic data due to be released, the Australian dollar was unlikely to move above $US1.0480 today.

Offshore overnight

United States

About 90 minutes before the close of trade, US stocks had risen on better-than-forecast earnings from companies including Pfizer and Valero Energy, returning benchmark indexes to five-year highs.

Key numbers:

• Dow Jones Industrial Average added 0.55% to 13,958.80


• S&P 500 added 0.43% to 1506.69


• Nasdaq Composite Index lost 0.02% to 3146.36

Europe

European stocks drifted up as traders await key data and look ahead to a US Federal Reserve monetary policy meeting.

Key numbers:

• London’s FTSE 100 added 0.71% to 6339.19, hitting its highest close since May 2008


• Frankfurt’s DAX 30 added 0.20% to 7848.57


• In Paris the CAC 40 added 0.135 to 3785.82

Asia

Most Asian markets closed higher as traders await key economic data out of the US and China and the start of the corporate earnings season.

Key numbers:

• Tokyo added 0.39% to 10866.72


• Hong Kong's Hang Seng added 0.07% to 23655.17


• China's Shanghai composite added 0.53% to 2,358.98

Commodities

Energy

Oil prices have hit multi-month highs on the back of the weaker US dollar and on the eve of a key monetary policy announcement in top crude consumer the United States, dealers said.

• Brent North Sea crude for delivery in March rallied as high as $US114.49, hitting the highest level since mid-October 2012. It later stood at $US114.22 per barrel, up 74 US cents from Monday’s closing level.


• New York’s main contract, light sweet crude for March or West Texas Intermediate (WTI), struck $US97.82, reaching a peak last seen on September 17. The contract later pulled back to $US97.57, up $US1.13 from Monday.

Precious metals

Gold has gained for the first time in five sessions after some weak US economic data underlined the view that the Federal Reserve may hold to its current stimulus program.

• The most actively traded contract, for February delivery, on Tuesday rose $US7.90, or 0.5 per cent, to settle at $US1,660.80 a troy ounce on the Comex division of the New York Mercantile Exchange.


• March delivery silver rose 40.4 US cents to $US31.184.

Base metals

Base metals have ended higher on the London Metal Exchange (LME), as investors shrugged off disappointing US consumer confidence data and a weaker greenback lent some support to prices.

• LME three-month copper was up 0.6 per cent at $US8,102 a metric ton.


• Nickel gained the most of the complex Tuesday, ending the session 1.3 per cent higher on the day at $US17,850/ton.

How we fared yesterday

The sharemarket ended sharply higher, led by the big banks and chalking up gains for a ninth straight session.

The benchmark S&P/ASX200 index jumped 53.8 points, or 1.1 per cent, higher to a new 21-month high of 4889.0, while the broader All Ords added 52 points, or 1.1 per cent, to 4910.9.

BusinessDay with agencies