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Australian Stock Market Leads - 02/21/2012
By Christine Gaylican: Subscribe to Christine's RSS feed
February 20, 2012 6:14 PM EST
The Australian stock market had opened flat this morning as momentum is yet to build up with the meeting among European leaders proceeding as of posting time.
The European stock markets extended gains overnight, responding well to the positive outcome reached by most Asia-Pacific indices yesterday. With the U.S. markets on a holiday, there is not much happening except for the currency markets. Morrison Securities said the U.S. dollar fell to a near two-week low against the euro Monday on hopes European finance ministers would agree on conditions for another loan for Greece.
"The bulls will be hoping for a definitive arrangement which prevents a Greece style situation in the future," IG Markets analyst Stan Shamu notes.
He said that in case the meeting fails to deliver, resource stocks are bound to benefit.
Ric Spooner, chief market analyst, CMC Markets, observes that "Australian risk markets have recently established a trading range. The S&P/ASX 200 index is ranging between trend line support around 4175 and resistance represented by the 200 period moving average currently at around 4296."
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IG Markets and CMC Markets agree that traders will focus on the RBA minutes due to be released this afternoon. Meantime, those reporting Tuesday include Flight Centre, Monadelphous, Oil Search, OneSteel and REA Group. MND reported this morning, with its net profit coming in within guidance. FLT has increased its FY guidance range, a move which will likely be cheered by investors.
CMC's Mr Spooner points out that the markets need to watch out for the flash PMI manufacturing index for China, whichshapes as a potentially key data release for markets on Wednesday.
"China's ability to achieve a soft landing in the face of weak European demand, bottoming at around 7-8% GDP growth will have a key impact on world demand generally and the Australian resource sector in particular," he says.
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