By Christine Gaylican: Subscribe to Christine's RSS feed
February 21, 2012 6:51 PM EST
Market consolidation and some profit-taking will hit the Australian stock markets on Wednesday as investors have shifted their wariness to the lingering tension with Iran and the rest of the members of the United Nations.
The Greek deal finally getting the nod from the European leaders did not give enough push to the U.S. and European markets overnight.
Among the major averages, the Dow Jones Industrial Average was up 0.1% to close at 12966. The S&P was also 0.1% higher at 1362, whilst the NASDAQ shed 0.1% to finish at 2949.
Analysts are now weighing the possible impact of increasing oil prices in the spot and futures markets as Iran cut down supplies of the fuel to countries that promoted economic sanctions.
Although this would provide a good lead to the resources-related stocks, IG Markets analyst Stan Shamu points out that "oil has risen to levels where it could start hampering growth, which is one of the reasons flagged for the market's quiet performance overnight."
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Mr Shamu says that the Aussie dollar was generally weaker, which could start to give some relief to the local currency-sensitive stocks.
"The correlation between the AUD and copper has broken down in recent days. AUD/USD is looking a bit tired and a break below 1.0625 would suggest it has ceased trending higher for now and will trade in a 1.05-1.08 range for a while.
A key event for risk assets today will be China's HSBC flash manufacturing PMI numbers, which could influence sentiment in afternoon trading. The company reports of Woodside Petroleum, Computershare, Coca-Cola Amatil, CSL Limited and Seek are the major stocks to look out for.
At the start of the session on Wednesday, the Aussie market is sluggish and down around half a percent at 4271.
On the economic front the wage price index data is due at 11.30am. However, this is not a big market mover.
