Australian Stock Market Report - Morning 02/01/2012

January 31, 2012 6:27 PM EST

The Conference Board consumer confidence reading dipped unexpectedly in January, slipping from 64.8 to 61.1. Consensus expectation had been for a further gain up to 68.0. The Chicago PMI fell from 62.2 from 60.2 in December. Key forward looking subindices including production and new orders eased over the month.

The S&P/Case-Shiller composite index of single-family home prices in 20 metropolitan areas fell 0.7pct in November following a similar decline in October.

European shares recorded healthy gains on Tuesday after Eurozone leaders approved stricter budget controls. Hopes of a debt deal for Greek private debt continued to draw speculation. Greek banks were the standout gainers up 17.3pct. Energy stocks also recorded healthy gains with the STOXX Europe 600 Oil & Gas Index up 1.8pct. The FTSEurofirst index rose 0.6pct, with the UK FTSE up 0.2pct and the German Dax gained 0.2pct.

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US sharemarkets fell on Tuesday after weak US economic data gave investors reason to pause. Exxon Mobil Corp fell 1.8pct and was the biggest drag on the Dow and S&P 500, as fuel margins and production fell short of estimates. According to Thompson Reuters of the 204 companies in the S&P500 that have reported results 60pct have beat expectations - below the average 70pct recorded in recent years. At the close of trade, the Dow Jones was lower by 21 points or 0.2pct and the S&P 500 fell 0.1pct while the Nasdaq rose 2pts or 0.1pct.

US treasuries rallied on Tuesday (yields lower) as the late slide in US equities and ongoing concerns about the European sovereign debt saw investors remain cautious. US 2yr yields were flat at 0.219pct and US 10yr yields fell by 5pts to 1.801pct - the lowest levels in six weeks.

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The Euro fell against the US dollar in late trade as the lack of a breakthrough in Greece´s debt talks and mounting concerns that Portugal could need a second bailout drove sentiment. The Euro fell from highs near US$1.3210 to US$1.3045, heading into the US close near US$1.3080. The Aussie dollar hit early highs near US106.80c before easing to US105.85c, and was near US106.15c in late US trade. And the Japanese yen traded between 76.15 yen per US dollar and JPY76.40 and was near JPY76.20 in late US trade.

US crude oil prices fell on Tuesday in a volatile trading session following the weaker-than-expected economic data. Nymex oil fell by US30c or 0.3pct to US$98.48 a barrel and London Brent crude rose US23c to US$110.98 a barrel. For the month US crude lost 0.4pct.

Base metal prices were lower on the London Metals Exchange on Tuesday. The weaker US data resulted in copper sliding for a third straight session down 1.4pct. And the gold price rallied in the last hour of trade with Comex February gold up US$6 or 0.3pct to US$1,740.40 an ounce. For the month gold rose 11pct.

Ahead: In Australia, new home sales and PMI data are released. In the US, construction spending, vehicle sales and ISM manufacturing data are released.