A man looks the board of the Australian Securities Exchange ASX in central Sydney August 7, 2013.
A man looks the board of the Australian Securities Exchange in central Sydney August 7, 2013. Reuters/Daniel Munoz
  • Local shares have staged a stunning turnaround on Tuesday despite ongoing losses for US and European equity markets overnight. European shares fell on Monday as investors debated what comes next for Greece after the "No" vote in the referendum on bailout conditions. The FTSEurofirst 300 fell by 1.2% with the German Dax down by 1.5% while the UK FTSE eased by 0.8%. US sharemarkets fell in line with markets in Asia and Europe on uncertainty about what happens next in the Greek debt crisis. The Dow Jones fell by 46.5 points or 0.3%, after being down 166 points in early trade but also up 4 points. The S&P 500 index eased 0.4% while the Nasdaq lost 17 points or 0.3%.
  • Every sector measured by the ASX has risen in the first half of the session. Mining and energy stocks have moved ahead despite weakness in underlying prices. World oil prices fell sharply on Monday on fears that the Greek debt crisis and jitters about the Chinese financial system will crimp economic growth and demand for oil. . Brent crude futures fell by the most in five months to US$52.68. Iron ore fell by 5.4% overnight to US$52.28 (CFR China), which is its lowest level since April. Prices have fallen for eight consecutive days as increased Chinese port stocks and a ramp up in 2H production from the major miners weigh down on price outlooks.
  • Gold stocks continued to flourish despite and underwhelming performance in gold prices in recent days. Gold futures were up slightly overnight but have failed to rally in the past weeks despite weak global equity markets. According to a Bloomberg report, over US$300m has been wiped from the value of gold-backed ETF’s in the past month. Gold miners such Newcrest Mining Limited (NCM) and Northern Star Resources Ltd (NST), which both gained in the order of 3% yesterday continued on the trajectory today with the latter up by 2.7% and the former ahead by 1.7%.
  • National Australia Bank (NAB) remains committed to an exit from its U.K. banking operations before the end of the year according to the latest update. The lender reiterated its intention to spin off between 70% and 80% of its Clydesdale division to existing NAB shareholders and sell the remaining 20%-30% via an initial public offering. A stand alone Clydesdale would rank as one of the largest of the U.K.'s mid-size banks, with approximately $44 billion in customer loans. The NAB has been withdrawing from international operations to focus on core franchises in Australia and New Zealand, including a withdrawal from the U.S. with the staged sale of regional lender Great Western Bancorp Inc. NAB was one of the best of the big 4 banks this morning with a 89 cent or 2.6% gain to $34.35.
  • Major currencies have drifted against the greenback during European and US trade. The Aussie dollar held between US74.80c and US75.30c overnight although it eased to as low as US 74.73 in early Asian trade.
Tom Piotrowski - Market Analyst (Author)
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