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need2know: Flat open to start week

Canberra Times logo Canberra Times 25/05/2014 Canberra Times

Local stocks are poised to open flat even though the S&P 500 closed at a record high ahead of the weekend.

What you need2know:

• SPI futures up 3 points to 5514

• AUD at 92.35 US cents, 94.20 Japanese yen, 67.78 Euro cents and 54.88 British pence at 7am AEST

• On Wall St, S&P500 +0.4%, Dow Jones +0.4%, Nasdaq +0.8%

• The Dow closed at a record high on Friday at 16,583.34

• In Europe, Euro Stoxx 50 +0.5%, FTSE100 -0.1%, CAC +0.3%, DAX +0.5%

• Spot gold down 0.1% to $US1292.61 an ounce in New York on Friday

• LME copper adds 0.6% to $US6918.75 a tonne in London on Friday

• Brent oil flat at $US110.54 per barrel in New York on Friday

What’s on today

There are no local economic reports scheduled.

In Japan, Bank of Japan meeting minutes will be released.

Stocks to watch

Telstra is set to hold a mobiles briefing.

Deutsche Bank has maintained its ‘buy’ recommendation on James Hardie Industries. It has a 12-month price target of $16.16.

JPMorgan has retained its ‘neutral’ rating and maintained its share target price of $44.05 on REA Group.

SP Ausnet and Whitefield Ltd will trade ex dividend today.


The euro fell against the pound on Friday after a disappointing report on German business sentiment supported the view the European Central Bank will cut interest rates next month.

The euro fell to a three-month low of $US1.3614 and briefly broke below its 200-day moving average of $US1.3636 before retracing to $US1.3631. Against the yen, the single currency was flat at 138.92 yen, erasing modest losses, and held above a 3-1/2 month low set on Wednesday.

The euro's modest losses boosted the dollar index, which tracks the greenback against a basket of major currencies, to its highest in six weeks at 80.443 before easing to 80.364. 

Against the yen, the dollar was up 0.2 per cent at 101.93, recovering from the 3-1/2 month low of 100.805 yen hit two days earlier.


Credit Suisse is "committed" to keeping its customer-focused, derivatives-based commoditiesbusiness, which hews to a model that many of its rivals are now returning to, the bank's global head said.

Palladium fell on Friday as investors took some profits after hitting 2-1/2-year highs a day earlier and the dollar firmed, even as concerns remained about supplies as strikes in major producer South Africa drag on.

United States

Wall St will be closed on Monday in the US for the Memorial Day holiday.

The S&P 500 closed at a record high on Friday, buoyed by a rally in housing stocks after better-than-expected home sales and a jump in Hewlett-Packard shares.

The S&P 500 posted its fifth daily advance out of the past six sessions, and its first weekly gain out of the past three.

For the week, the Dow rose 0.7 per cent, the S&P 500 jumped 1.2 per cent and the Nasdaq gained 2.3 per cent.

A total of 146 stocks on the Big Board and Nasdaq touched 52-week highs, while just 26 issues hit 52-week lows. Two of the issues hitting 52-week lows on the Nasdaq are exchange-traded securities that track volatility.


French real-estate firm Gecina bucked the trend of low volumes in European share trading on Friday, as investors generally steered clear of big bets before a long weekend in Britain and elections in Ukraine and across the European Union.

Germany's leading indicator of business confidence, the Ifo index, pointed to slower growth in Europe's largest economy as the index hit its lowest level this year in May.

There is a bank holiday in the UK on Monday.

Standard & Poor's raised Spain's sovereign debt rating on Friday by one notch to BBB with a stable outlook, the third agency to do so in recent months in response to the country's improving economic fortunes.

What happened Friday

On Friday, the benchmark index added 0.2 per cent, with a solid debut from the biggest initial public offering to hit the boards in 2014. Maintenance and catering services company Spotless Group Holdings lifted 7.2 per cent to $1.72. Intueri Education Group rose 8.7 per cent on its IPO to $2.37.

Telecommunications was the best-performing sector over the week, as Telstra Corporation advanced 5.38 per cent to a nine-year high of $5.38.

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