Returning from the New Years public holiday the Australian share market will today start the new trading year. Despite a stellar 15.1 per cent gain over 2013, after a gain of 14.6 per cent in 2012, local stocks are set for a soft beginning to 2014 amid the holiday season.
Before the new year global markets were celebrating gains. European markets posted their best year since 2009 ahead of Wall Street’s last session of 2013. The Dow Jones Industrial Average finished 2013 with its best performance since 1995, the S&P 500 saw its largest annual advance since 1997 and the Nasdaq ended at its highest point in 13 years after upbeat housing and consumer confidence figures were released on Tuesday.
China economic news
China’s factory activity eased more than expected at the end of 2013. The National Bureau of Statistics reports the official Purchasing Managers’ Index slipped to 51 in December, from 51.2 the month before, but remained above the 50-mark which shows the sector is in expansion territory. The final HSBC/Markit PMI is expected to be released today, following last month’s preliminary read which showed factory sector activity grew at the slowest pace in three months.
US economic news
Home prices in 20 American cities jumped by the largest amount in more than seven years in October 2013 from the year before. S&P/Case-Shiller index’s showed property prices gained 13.6 per cent in October after a year-on-year gain of 13.3 per cent the month before.
The latest read on American consumer confidence has climbed more than expected. The Conference Board’s index of consumer confidence gained 78.1 in December, from 72 month before.
Figures
Wall Street’s major indexes had record runs over 2013. The Dow Jones Industrial Average rallied 27 per cent over the year, the S&P 500 jumped 30 per cent in 2013 and the Nasdaq settled the year with an annual gain of 38 per cent. Ahead of the New Year the Dow Jones Industrial Average lifted 72 points to end 2013 at 16,577, the S&P 500 rose 7 points to finish 2013 at 1,848 and the NASDAQ added 22 points to end 2013 at 4,177.
In Europe Germany’s DAX led the region higher over 2013 with a 25 per cent gain, London’s FTSE climbed 14 per cent and Paris was 18 per cent higher over 2013 - marking the best year since 2009 for both markets. Before the New Year London’s FTSE gained 18 points, Paris gained 20 points and Frankfurt fell 37 points.
Across Asia Japan was among the best performing markets in the world with the benchmark Nikkei climbing 57 per cent, Hong Kong’s Hang Seng rose about 3 per cent and China’s Shanghai Composite fell almost 7 per cent in 2013. Before the New Year Tokyo’s Nikkei gained 112 points, Hong Kong’s Hang Seng gained 62 points, and China’s Shanghai Composite gained 18 points.
The Australian share market advanced 15.1 per cent over 2013 and finished the month of December with a 0.5 per cent gain. Before New Year the S&P/ASX 200 index lost 4.6 points on Tuesday, finishing the last day of the year at 5,352. On the futures market the SPI is 8 points lower.
Currencies
After starting 2013 above parity with the US dollar the Australian dollar finished the year touching three-year lows against the greenback. Given record low local interest rates and the threat of reduced US stimulus the Aussie has been tipped to keep falling in 2014. This morning the Australian Dollar at 7:30AM was buying $US0.8892, 53.69 Pence Sterling, 93.74 Yen and 64.67 Euro cents.
Economic news due out today
Australian Industry Group: The performance of manufacturing index for December, which was sitting in contraction territory at 47.7 points in November 2013.
Reserve Bank of Australia: Index of commodity prices for December, which firmed 0.1 per cent in November 2013.
Stocks to watch
James Packer’s Crown Resorts Limited
(ASX:CWN) is among Charlie Aitken’s stock picks this year. The Sydney-based stockbroker also named Andrew Forrest’s iron ore company Fortescue Metals Group Limited
(ASX:FMG) and Kerr Neilson’s international fund manager Platinum Asset Management Limited
(ASX:PTM) among stocks to watch. In his last note for the year Mr Aitken highlighted the importance of identifying solid management teams, with each of the three mentioned company’s having significant stakes held by management. Shares in Crown Resorts dipped 0.47 per cent on New Years Eve to end 2013 at $16.85.
Party goers at Village Roadshow Limited’s
(ASX:VRL) recently opened Wet'n'Wild water theme park in Sydney were dealt a blow on New Years Eve when an event was cancelled at short notice. Up to 9,000 ticket holders were reportedly left stranded when New Years celebrations were called off, for what was billed as Australia's first music festival at a water theme park, just hours before it was due to start. The external promoters One Cube Entertainment blamed the cancellation on last minute major production issues and says it will be refunding all tickets sold for the New Years event and rescheduling the event for Australia Day later this month. Shares in Village Roadshow firmed 0.8 per cent on New Years Eve to end 2013 at $7.56.
Dividends today
Clime Capital
(ASX:CAM) paying a 1 cent fully franked dividend
Dividends tomorrow
Programmed Maintenance Services Limited
(ASX:PRG) paying a 6 cent fully franked dividend
Commodities
The price of gold sank 28 per cent in 2013, snapping 12 years of annual gains which saw the price of the precious metal surge more than 600 per cent. In the New Year gold has risen $5.20 to $US1,202 an ounce for the February contract on Comex.
Silver fell almost 36 per cent in 2013 and is now $0.24 lower at $19.37 for March.
Copper is $0.01 lower at $3.39 a pound.
Oil has fallen $0.87 at $US98.42 a barrel for January light crude in New York.
