Worse-than-expected industrial production numbers out of China at the market’s close on Wednesday has fed losses in the US, which in turn has hurt the Australian market.
“During the Asia Pacific session yesterday, we’ve seen a bit of a U-turn, with the pressure coming off shares which is inching cautiously back into the market,” CMC Markets chief market strategist Michael McCarthy said.
“But that was derailed by the weaker numbers, despite the fact that we saw rallies across Europe, by the time that news had hit the commodity market. With copper and oil lower, it soured investor sentiment.
“That double whammy, lower US markets and lower commodity prices, is really weighing on us today.”
Energy stocks were hit hard by oil’s price fall, with Woodside Petroleum down 87 cents at $28.47 and Origin 7.00 cents lower at $1.35.
BHP Billiton was down another 55 cents to $20.40, after it said new evacuations have been ordered at the scene of Brazil’s deadly iron ore mine dam burst.
A drop in the iron ore price also saw Rio Tinto fall 54 cents to $48.86 and Fortescue Metals drop 4.5 cents to $2.32.5.
The big banks were mixed. ANZ was up 16 cents to $26.39, and National Australia Bank gained 3.00 cents to $28.40.
But Commonwealth Bank was down 3.00 cents at $75.97 and Westpac lost 7.00 cents to $30.07.
Meanwhile, Newcrest Mining was up 12 cents at $11.65, and OceanaGold Corp gained 1.00 cent to $2.62, despite gold prices falling.
McCarthy said Thursday’s early market moves could be due to investors bargain hunting before the Australian Bureau of Statistics releasing labour force figures at 11.30 (AEDT).
NEW YORK – US stocks had turned higher by midday, but reversed in afternoon trade with the drop in oil prices weighing on energy shares and limiting gain.
“The moves today look technical more than anything, but there is some dollar weakness,” said Ulrich Leuchtmann, head of FX research at Commerzbank in Frankfurt.
Gains in technology shares, including Microsoft, initially helped support US stocks, before the turn.
The Dow Jones industrial average was down 40.62 points at 17,717.59 and the S&P 500 had lost 2.96 points to 2,078.76 shortly and the Nasdaq Composite was down 1.17 points at 5,082.07 at 0710 AEDT.
LONDON – SABMiller shares jumped as the world’s top brewer Anheuser-Busch InBev wrapped up a vast deal to take over its British rival, while the sector was lifted also by restructuring at Carlsberg.
European stock markets rose also on Wednesday on Chinese stimulus hopes, mirroring earlier gains in Asia following a trail of disappointing economic data from Beijing.
A sagging early Wall Street brought European markets off their highs, but did little to spoil the upbeat mood prompted by events in the beer market.
The brewing sector grabbed the headlines as Belgian-Brazilian behemoth AB InBev announced it had finalised a $US121 billion ($A172.28 billion) deal for its nearest rival SABMiller, in the third biggest takeover in global corporate history.
The blockbuster transaction, worth the equivalent of 112 billion euros ($A170.84 billion) including debt, will bring together InBev’s top lagers like Beck’s, Budweiser and Stella Artois, with SABMiller brands Foster’s, Grolsch and Peroni.
“The InBev/SABMiller deal is huge and markets will always toast a deal of this magnitude,” Oanda analyst Craig Erlam told AFP.
News of the takeover sent SABMiller’s share price jumping to close 1.9 per cent up at STG40.50 ($A87.12) – below InBev’s agreed cash offer price of STG44.
The vast takeover helped push the London stock market into positive territory for the first time in five days.
London’s benchmark FTSE 100 index closed 0.4 per cent higher, Frankfurt’s DAX 30 climbed 0.7 per cent and the CAC 40 in Paris won 0.8 per cent compared with Tuesday’s close.
HONG KONG – Shanghai stocks managed to lead a regional advance as more Chinese figures indicating weakness in the world’s number two economy spurred hopes Beijing will unveil more stimulus measures.
Beijing said on Wednesday that growth in output from China’s factories fell to a six-month low last month and came in below expectations – the latest in a run of disappointing data this week, following downbeat trade and inflation figures.
But Zhang Gang, an analyst from Central China Securities, told AFP, the news raised hopes for more economy-boosting moves by Beijing.
There was a silver lining in retail sales, which grew at their fastest rate since December.
Hopes for another strong reading next month will be high as China marks its annual “Singles Day” sale – the world’s biggest online shopping day – with e-commerce giant Alibaba saying around $US9 billion ($A12.81 billion) was spent in the first 12 hours.
Shanghai ended the day in positive territory, as did Tokyo and Sydney, although Hong Kong retreated.
Despite ongoing weaknesses in global economy, the Fed has been widely tipped to increase borrowing costs as it looks to prevent bubbles appearing at home.
The benchmark Nikkei 225 index finished up 0.10 per cent, or 20.13 points, at 19,691.39.
WELLINGTON – The S&P/NZX 50 Index rose 10.73 points, or 0.2 per cent, to 6013.54.
BHP – BHP BILLITON
New evacuations have been ordered at the scene of Brazil’s deadly iron ore mine dam burst as the chief executives of the mining giants that own the operation made a joint visit.
Stocks to watch on Thursday
AZJ – AURIZON: Aurizon has its annual general meeting in Sydney on Thursday.
BXB – BRAMBLES: Brambles holds its annual general meeting in Sydney.
GNC – GRAIN CORP: Graincorp is slated to post full year results on Thursday.
IAB – INABOX GROUP: Inabox Group holds its annual general meeting in Sydney on Thursday.
MGR – MIRVAC: Mirvac has its AGM in Brisbane.
REA – REA GROUP: REA Group holds its annual general meeting in Brisbane.
RHC – RAMSAY HEALTH CARE: Ramsay Health Care has its annual general meeting in Sydney.
SGM – SIMS METAL MANAGEMENT: Sims Metal Management has its annual general meeting in Perth on Thursday.
SWM – SEVEN WEST MEDIA: Seven West Media has its annual general meeting in Sydney.
TWE – TREASURY WINE ESTATES: Treasury Wine Estates has its annual general meeting in Adelaide.
WES – WESFARMERS: Wesfarmers has its annual general meeting in Perth.
Local News Matters
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