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Ig Markets Morning Comment

Fuseworks Media
Fuseworks Media

On Wall St overnight, US stocks climbed as traders digested the stronger-than-expected data out of China and news that banks have 8 years to implement the new Basel 3 capital adequacy requirements. It was the fourth straight day of gains, with the S&P 500 erasing its loss for the year and closing at its highest level since August 9.

The technology heavy NASDAQ was the top performer, up 1.9% while the S&P 500 and Dow Jones Industrial Average added 1.1% and 0.8% respectively.

Locally, the ASX 200 is called to open 0.7% firmer at 4646 following the strong overnight session.

Financials are likely to add the most points today after the US financials sector was the strongest performer, up 2.1%. Banks globally were boosted by the news that they have until 2018 to comply with new Basel 3 banking capital rules, with the proposed rules not as strict as first thought.

The materials space is likely to have a strong local session too after its US counterpart rose 1.6%. Base metal leads from the London Metals Exchange were mostly stronger while Rio Tinto and BHP Billiton both jumped 2.5% in normal London trade. BHP Billiton's ADR is pointing towards a gain of 1.1% to $38.97 on the open.

Elsewhere, strong gains among the US consumer discretionary (1.2%) and industrial (1%) sectors is likely to boost the local names. A gain of 0.8% for the US energy sector may boost the domestic stocks, although the Crude Oil prices since 4pm yesterday is basically unchanged.

In summary, it looks like more broad based gains on the open before attention turns to Asian trade, as well as the National Australia Bank Business confidence and conditions survey due for release at 11.30am. Also keep an eye out for news out of Japan, with industrial production numbers due around 2.30pm and possible news about the potential change in leadership.

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