Australian Securities Exchange (ASX)
People walk past the Australian Securities Exchange (ASX) building in central Sydney October 20, 2008. Reuters/Daniel Munoz
  • In US economic data, auto sales rose from an annualised rate of 17.55 million in July to 17.81m in August - the biggest sales result in more than a decade (July 2005). Construction spending rose 0.7% in July, above forecasts. The ISM manufacturing index eased from 52.7 to 51.1 in August, below forecasts.
  • In German economic data, unemployment fell by 7,000 in August with the jobless rate at a record low of 6.4%. The manufacturing purchasing managers index lifted from 51.8 to a 16-month high of 53.3 in August.
  • European shares fell in line with Asian markets as investors continued to adjust to over-valued conditions. Some claimed the share declines were prompted by a modest fall in the Chinese manufacturing purchasing managers index from 50.0 to 49.7 in August. The FTSEurofirst 300 index fell by 2.8%, the German Dax fell by 2.4%, while the UK FTSE index lost 3.0%. In London trade, mining shares fell with shares in BHP Billiton down by 6.7% while Rio Tinto lost 4.9%.
  • US sharemarkets fell again on Tuesday. Investors are adjusting portfolios to over-valued conditions and the uncertainties of rate hikes in coming months and a softer Chinese economy. After being down 549 points in late trade, the Dow Jones ended lower by 470 points or 2.8% with the S&P 500 down by 3.0% while the Nasdaq lost 140 points or 2.8%.
  • US treasury prices rose (yields lower) as investors re-adjusted portfolios from equities to government bonds. US 2 year yields fell by 4 points to 0.71% with US 10 year yields down by 6 points to 2.16%.
  • The US dollar was mixed against major currencies in European and US trade. The euro fell from highs near US$1.1330 to lows near US$1.1235, before rebounding to end US trade near US$1.1300. The Aussie dollar fell from highs near US71.20c to lows around US70.15c before ending US trade near US70.20c. And the Japanese yen strengthened from near 120.70 yen per US dollar to JPY119.54, ending US trade near JPY119.75.
  • World oil prices reversed the previous days sharp gains. Investors doubted the determination of OPEC producers to talk with other producers about curbing output. Traders also highlighted that US oil production remained high despite modest falls in the past two months. Brent crude fell by US$4.59 or 8.5% to US$49.56 a barrel while US Nymex crude fell by US$3.79 or 7.7% to US$45.41 a barrel.
  • Base metal prices fell by up to 3% on the London Metal Exchange, with nickel leading the falls. But other metals only fell up to 1.2% while tin rose by 4.2%. The Comex gold futures price rose by US$7.30 or 0.6% to US$1,139.80 per ounce. Iron ore was unchanged at US$55.70 a tonne.

Ahead: In Australia, the National Accounts is released. In the US, the ADP employment index is released with factory orders.

Reporting by Commsec

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