need2know: Shares poised to open down

Local stocks are set to open sharply lower after a broad sell off on global markets.

What you need2know:SPI futures down 29 points to 5443 AUD at 93.97 US centsOn Wall St, S&P 500 -0.7%, Dow -0.7%, Nasdaq -1.3%In Europe, Euro Stoxx 50 -1.4%, FTSE -1.3%, CAC -1.4%, DAX -1.4%Spot gold up $US1.90 to $US1318.90 an ounceBrent oil down $US1.24 to $US109.00 per barrelIron ore up slightly at  $US96.50 per tonne 

What’s on today

Australia: June Westpac-MI consumer confidence index;

US: Federal Reserve minutes of June 17-18 FOMC meeting. 

Stocks to watch

Pharmaxis has said a $US20 million payment from financier NovaQuest Capital Management is at risk following allegations that it has breached its contract, in a move that could be the killer blow for the drug developer.

First-round bids for Leighton Holdings’ $1 billion-plus John Holland and Services businesses are due on July 24, sources said on Tuesday.

Morgan Stanley has cut gold producer Newcrest Mining to “equal-weight/underweight” with a price target of $10.60 a share, down from $12.10 a share after recent guidance “underwhelmed”.

Deutsche Bank has increased its valuation on Aristocrat Leisure by 12 per cent to $7.20 a share and maintained a “buy” rating on the stock.


The US dollar fell against the Japanese yen as yields on long-dated Treasuries dropped for a second day, with investors wary of stocks heading into the US corporate earnings season.

The dollar has erased the gains it made against the yen on the June employment report last Thursday that showed the US economy continuing to gain strength. It has stabilised at two-week highs against the euro.

Richmond Federal Reserve president Jeffrey Lacker said US inflation has bottomed out and is moving toward its target, with economic growth continuing at a moderate pace.


Copper, aluminium and zinc touched fresh peaks, driven by speculators buying back short positions as the outlook for the global economy brightened. Zinc rose to its loftiest in three years, also boosted by uncertainty over future shortages, while aluminium hit a one-year high and copper the strongest in nearly five months before retreating.

Palladium rose for the 12th straight session to the highest level in more than 13 years, on supply concerns in South Africa, and firm demand in major car making markets China and the US.

Brent crude slid for a seventh day, hitting a one-month low as Libyan oil exports looked likely to rise and fears eased of supply disruption in Iraq. Brent has shed more than 5 per cent since last month, when the Iraq crisis drove prices to a nine-month high of $US115.71.

United States

Shares on Wall Street fell in a broad selloff on Tuesday, dropping for a second straight session as investors exercised caution ahead of the start of earnings season.

Federal Reserve Chair Janet Yellen will go before Congress next week to deliver the U.S. central bank’s latest report on monetary policy, congressional officials said.


Banking stocks led European shares lower on Tuesday as German banks became the latest lenders to be negotiating a costly legal settlement with US authorities. Euro zone banks fell 2.8 per cent, the biggest sectoral faller, led lower by Commerzbank.

Shares in Commerzbank fell 5.6 per cent as sources told Reuters that US authorities had begun settlement talks with the bank and its larger rival Deutsche Bank, down 2.1 per cent, over their dealings with countries blacklisted by the United States.

What happened yesterday

Shares drifted lower as local data showed that while business conditions and sentiment improved again in June consumer confidence continued to ­soften in the wake of federal budget cuts announced in May.

The benchmark S&P/ASX 200 Index declined 0.2 per cent to 5510.9 points, while the broader All Ordinaries Index eased 0.1 per cent to 5498.5 points on Tuesday, as BHP Billiton and the big four banks all receded.

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