Australian Stock Market Report – Morning September 29, 2014

China exports — Workers wearing uniforms are seen in front of a cargo vessel at the port in Ningbo, Zhejiang Province, May 13, 2014. China is increasing its support for its wobbly trade sector with a raft of new measures that include giving more tax breaks, credit insurance and currency hedging options to its exporters. Picture taken May 13, 2014. Reuters/Stringer

* In US economic data, the final reading on US June quarter GDP was revised up from 4.2% to 4.6%. The result was in line with expectations. The major contributors were a lift in business investment and stronger exports (up 11.1% in June quarter and the biggest gain since 2010). Inflation as measured by the PCE index was unchanged at a 2.3% annual rate. The final University of Michigan Consumer Confidence reading for September held steady at 84.6 and was well ahead of the August result of 82.5.

* European shares were mostly higher on Friday, led by the banking sector. The STOXX Europe banking index rose 1% on bets that it would benefit the most from the ECB's ongoing stimulus. The FTSEurofirst 300 index rose by 0.3%. The German Dax fell 0.2% while the UK FTSE gained 0.2%. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.8% while Rio Tinto fell 0.5%.

* US sharemarkets rebounded on Friday as upbeat economic data and the prior session's sharp losses spurred a round of bargain hunting. Apple rallied 2.9% after the almost 4% drop on Thursday. Nike shares jumped 12% after posting better-than-expected first quarter earnings, helped by a lower tax rate and stronger consumer spending on footwear and apparels. The Dow Jones index rose by 167 points or 1%. The broader S&P 500 index gained 0.9% while the Nasdaq rose 45 points or 1%. For the week the Dow Jones lost 1%, while the S&P 500 gave back 1.4% and the Nasdaq was the worst performer down 1.5%.

* US treasury prices fell on Friday (yields higher). The departure of Bill Goss from Pimco triggered a bout of selling on speculation that the world's largest bond fund may shift away from US government debt. US 2 year yields rose by 1 point to 0.591% while US 10 year yields rose by 3 points to 2.532%.

* Major currencies were weaker against the greenback over the European and US sessions on Friday. The US Dollar lifted for the 11th consecutive week. The Euro fell from highs near US$1.2755 to a 22-month low near US$1.2675, ending US trade near the US$1.2685. The Aussie dollar fell from highs near US88.00c to lows around US87.50c before ending the US session near US88.65c. And the Japanese yen weakened from 108.85 yen per US dollar to JPY109.45, ending US trade near JPY19.25.

* World oil prices lifted on Friday following the upbeat US growth data. Although ample world oil supplies continued to taper gains. Brent crude was unchanged at US$97 a barrel while the US Nymex crude price rose by US$1.01 a barrel or 1.1% to US$93.54 a barrel. For the week Brent lost 1.4% while Nymex crude gained 1.2%.

* Base metal prices were mixed on Friday. Nickel led the declines (down 2%) while copper lifted 0.4%. Gold prices fell on Friday with the Comex gold futures quote lower by US$6.50 an ounce or 0.6% to US$1,215.40 per ounce. Comex gold fell for the fourth consecutive week down 0.1%. Iron ore was unchanged on Friday at US$78.60 a tonne.

Ahead: In Australia, no economic data is released. In the pending home sales and personal income and spending are released.

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