The Fed, tech stocks & ECB fuel Wall St: Aus shares to firm higher

Market Reports

by Jessica Amir

In the US, we’ve seen equities rebound after bank and tech stocks rallied, which should inject fresh confidence into the Australian share market at the open, as the SPI tipping a gain of 40 points.

US bank stocks bounced 1.4 per cent higher after the Federal Reserve gave the green light for 34 of the largest US banks, to use extra capital for stock buybacks, dividends and other purposes.

While the tech space enjoyed a rebound following a sell-off, with gains in Facebook, Apple, Amazon and Netflix, which pushed the Nasdaq over 1.4 per cent higher.

Meanwhile, comments about the European Central Bank (ECB) not imminently tightening policy, also proppoed up Wall Street.

All of that left the S&P 500 to see its biggest 1-day gain in 2 months, rising 21 points, while the Dow Jones rose about 144 points.

US economic news

Pending home sales have dropped 0.8 per cent from April to May, surprising economist who expected a slight gain. The fall pulled pending home sales to be 1.7 per cent lower than May 2016. It comes as buyers are being sidelined by the lack of supply, to meet strong demand, coupled with fast growing prices.

Local economic news

The ABS will report on the leading indicator for the job market with job vacancy data for May. Also out today is the bodies publication called ‘Finance and wealth’ for the March quarter. The journal includes estimates of household debt, financial wealth and foreign ownership of shares.

And we can also expect the Housing Industry Association (HIA) to reveal the new home sales figures for April.

Markets

Wall Street closed higher on Wednesday: The Dow Jones Industrial Average gained 0.7 per cent to close at 21,455, the S&P 500 added 0.9 per cent to close at 2,441 and the NASDAQ advanced 1.4 per cent to close at 6,234.

European markets closed lower: London’s FTSE fell 0.6 per cent, Paris lost 0.1 per cent and Frankfurt shed 0.2 per cent.

Asian markets closed lower: Tokyo’s Nikkei fell 0.5 per cent, Hong Kong’s Hang Seng lost 0.6 per cent, and China’s Shanghai Composite shed 0.6 per cent

And back home, the Australian share market closed stronger on Wednesday: At the closing bell, The S&P/ASX 200 Index closed 42 points higher or 0.7 per cent up to finish at 5,756. On the futures market the SPI is 40 points up.

Company news

Auswide Bank (ASX:ABA) has settled $300 million in new residential mortgage-backed securities (RMBS). The Australia’s 10th ASX listed bank says, the residential mortgage loans were originated by the bank, through its branch networks and brokers. Auswide says the regulatory capital relief will provide the corporation with capital strength to support its lending growth. The deal also marks its first residential mortgage-backed security (RMBS) under ‘Auswide Bank’, instead of being under its formerly known, ‘Wide Bay Australia Limited's' WB Trust program. Shares in Auswide Bank (ASX:ABA) closed 0.2 per cent higher yesterday to $5.08.

Currencies

The Australian Dollar at 7:30AM was buying 76.38 US cents, 59.09 Pence Sterling, 85.78 Yen and 67.14 Euro cents.

Commodities

Gold has gained $2.50 to $US1,249 an ounce.
Silver has added 18 cents to $US16.83 an ounce.
And Oil has added 64 cents to $US44.88 a barrel.

Ex-dividends 







 

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