Outlook: ASX eyes China GDP after Yellen warning

Market Reports

The SPI is pointing to a slightly higher start for the Australian share market ahead of Chinese GDP numbers. Traders will also react to the US Federal Reserve Chair Janet Yellen’s Congressional testimony and US central bank’s monetary policy statement.   
 
Wall Street closed mixed after Yellen confirmed the Fed’s plans to maintain historic low interest rates for now and reiterated monetary policy remains appropriate. However Yellen’s cautious remarks also suggested some stocks appear stretched and may be overvalued, with the accompanying report highlighting small company stocks. The warnings prompted social media and biotechnology stocks to be sold off, in turn pushing down the tech heavy Nasdaq index into the red. 
 
China’s second quarter growth figures will be released today amid expectations the economy grew at an annual pace of 7.4 per cent.  
 
Global market movements
 
Wall Street closed mixed on Tuesday: The Dow Jones Industrial Average firmed 0.03 per cent to close at 17,061, the S&P 500 slipped 0.2 per cent to close at 1,973 and the Nasdaq lost 0.5 per cent to close at 4,416.
 
European markets dropped on Tuesday: London's FTSE 100 fell 0.5 per cent, France's CAC 40 fell 1 per cent and Germany's DAX fell 0.7 per cent.
 
Asian markets gained on Tuesday: Japan’s Nikkei rose 0.6 per cent, Hong Kong’s Hang Seng rose 0.5 per cent, and China’s Shanghai Composite rose 0.2 per cent.
 
The Australian share market slipped into the red yesterday after the release of the Reserve Bank of Australia’s (RBA) board meeting minutes and the Financial System Inquiry interim report: The S&P/ASX 200 index dipped 0.1 points to close at 5,511 on Tuesday. On the futures market the SPI is 6 points higher. 
 
Currencies 
 
The Australian dollar at 7:20am was buying $US0.937, 54.67 Pence Sterling, 95.27 Yen and 69.08 Euro cents.
 
Economic news due out today 
 
Westpac Banking Corporation (ASX:WBC) - Melbourne Institute: Leading Indexes of Economic Activity
 
Company news
 
Production results will continue to roll in with global miner Rio Tinto Limited (ASX:RIO) expected to release its second quarter output report today. Fortescue Metals Group Limited’s (ASX:FMG) full year production report is due tomorrow and BHP Billiton Limited’s (ASX:BHP) production results are expected next Wednesday. Last week Fortescue reported full year exports failed to meet its ambitious expectations despite a record fourth quarter result while Atlas Iron Limited’s (ASX:AGO) record shipments beat its annual output guidance. Shares in Rio Tinto rose 1.22 per cent to close at $63.10 on Tuesday ahead of today’s announcement. 
 
Shares in CuDeco Limited (ASX:CDU) rose yesterday after releasing an update on its Rocklands Group Copper Project in Queensland. The minerals developer says the process plant is coming together nicely at on track for preliminary wet commissioning activities towards the end of this year. CuDeco also advises mining continues on several fronts and is expected to ramp up to full production rates over the next few months. Shares in CuDeco rose 1.14 per cent to close at $1.775 on Tuesday following the announcement. 
 
Ex-dividends

Envestra Limited (ASX:ENV) paying a 3.5 cent unfranked dividend
 
Commodities 

Gold has dropped $9.60 to $US1,297 an ounce for the August contract on Comex. 
Silver has lost $0.18 to $20.73 for September. 
Copper has firmed $0.001 to $3.25 a pound. 
Oil has dipped $0.95 to $US99.96 a barrel for August light crude in New York.

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