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Market report: Thursday, March 3

Business

UPDATED: The volume of trades on Australia’s stock exchange jumped 39 per cent in February as the majority of listed companies delivered earnings reports.

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Around 22.3 million trades took place in February, up from 16 million in February 2014.

Average daily trades were 33 per cent higher at 1.06 million, and the average value of daily trades on the market rose one per cent to $4.4 billion.

Almost 10,700 company announcements were made via the Australian Stock Exchange in February, up from almost 8,800 a year earlier.

Shares in market operator ASX were up 29 cents to $42.27 at 11.40am (AEDT).

Earlier at 8.48am (AEDT) on Thursday, the share price index futures contract was up 25 points at 5.039.

In local economic news on Thursday, the Australian Bureau of Statistics is due to release international trade in goods and services data for January, while the Australian Industry Group’s Australian Performance of Services Index (PSI) for February is also due out.

The Australian Institute of Company Directors conference is on in Melbourne.

No major equities news is expected.

The Australian dollar has become the best performing currency overnight and is now targeting 73 US cents after surprisingly positive growth data.

NEW YORK – Wall Street is higher in muted – but swinging – trade as a fall in materials stocks offset gains in energy shares.

A report by payrolls processor ADP showing that the US private sector added more jobs than expected in February, adding to recent upbeat data that underscored the strength in the US economy.

“We’re in a holding pattern until Friday, when we get the payrolls number,” said Jeff Kravetz, regional investment director at US Bank Wealth Management in Phoenix, Arizona.

“There’s still a lot of money out there that’s looking for a home and if we continue to get good economic data, it is going to be positive for stock markets here,” he said.

LONDON – Britain’s top equity index fell, with the market’s earlier gains fizzling out as oil prices weakened, while shares in ITV and Intertek also declined.

Television and media group ITV fell 3.5 per cent, as the company’s cautious outlook about its advertising revenue offset more positive factors such as higher earnings and a special dividend payout.

“It would appear that a drop in viewing numbers on its main ITV channel has raised concerns that despite rising advertising revenues, the company is losing market share,” said CMC Markets UK chief market analyst Michael Hewson.

Intertek, which carries out tests to ensure the safety of products, also fell 4.6 per cent as its annual results underwhelmed some investors while Goldman Sachs cut its price target on the stock.

Traders said February’s unexpected dip in the UK’s construction Purchasing Managers’ Index (PMI) to a 10-month low, was also weighing on the London stock market.

“A weaker than forecast construction PMI has not helped,” said Spreadex analyst Connor Campbell.

HONG KONG – Asian stocks hit a two-month high, Japan’s and China’s main indices both rose more than four per cent, and European markets were up for the fifth day in a row, on track for their longest winning streak in five months.

Investors shrugged off further signs of weakness in global manufacturing, taking their cue instead from other indicators pointing to pockets of light amid the recent economic gloom such as US construction spending, and Australian and Swiss gross domestic product.

“Stocks are trading higher as Australian and Swiss growth figures came in better than expected. European markets have opened in the green and US stocks will certainly benefit from the global risk-on trading,” said Ipek Ozkardeskaya, market strategist at London Capital Group.

Investors also continued to take heart from announcements from China earlier this week of a cut in bank reserve requirements and structural reforms to the world’s economic growth engine.

WASHINGTON – US businesses added a healthy 214,000 jobs last month, another sign that the US job market remains resilient despite economic weakness overseas and tumult in financial markets.

The Federal Reserve says the economy was expanding in most of the country in January and February, helped by gains in consumer spending and home sales. But there were also rising headwinds from falling oil prices and a strong US dollar that held back some sectors.

BEIJING – China plans to target broad-based money supply growth of about 13 per cent this year, sources said, a signal that further monetary policy easing is likely during a painful economic restructuring that could result in millions of workers losing jobs.

BRASILIA – Mining company Samarco agreed with the Brazilian government to pay more than 24 billion reais ($A8.6 billion) in damages for a deadly dam spill in November, an environment ministry memo seen by Reuters says.

ENERGY

Oil prices have maintained their upward trend, as Russia’s Rosneft, the world’s biggest listed oil producer by volume, says it’s considering a cut to domestic production to balance the global market and as the firm faces a natural decline in 2016.

Brent crude was up 11 US cents, or 0.30 per cent, at $US36.92 a barrel, at 0753 Wednesday AEDT, while WTI, or US, crude was up 28 US cents at $US34.68.

PRECIOUS METALS

Gold has rebounded as the US dollar turned lower, shrugging off a turn higher in global shares and better-than-expected US economic data.

“Gold has clawed back yesterday’s losses despite hawkish comments from San Francisco Fed’s Williams, a strong ADP number, higher yields, and a steady dollar and stocks,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

San Francisco Federal Reserve President John Williams said there had been no substantial change in his outlook on the US economy or his opinion on the number of times the Fed should raise interest rates in 2016 and 2017.

“The strong, measured rally over the past two months fuelled by a voracious appetite from the ETF has brought gold agnostics and apostates back into the fold who now devoutly exalt every rally,” Wong said.

BASE METALS

Copper, aluminium and zinc have hit their highest levels in several months, bolstered by optimism that global growth will pick up and as speculators chased the rally.

Industrial metals also benefited from a “risk-on” attitude in financial markets that swept global shares and bond yields higher after investors latched onto positive data such as stronger-than-expected US private sector jobs growth.

“The story is great, but it’s a bit premature,” said analyst Vivienne Lloyd at Macquarie in London. “Given that (physical) premia in the US remain soft, there should be a bit of a retracement from current levels.”

ASX stocks to watch Thursday, March 3

BHP – BHP BILLITON: Mining company Samarco agreed with the Brazilian government to pay more than 24 billion reais ($A8.6 billion) in damages for a deadly dam spill in November, an environment ministry memo seen by Reuters says.

ORG – ORIGIN ENERGY

STO – SANTOS

The price of oil basically kept hold of recent gains, after Russia’s Rosneft, the world’s biggest listed oil producer by volume, said it was considering a cut to domestic production to balance the global market and as the firm faces a natural decline this year.

AAP

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