New Zealand shares held into modest gains at noon, with broad levels of interest in asset-backed stocks as investors tipped their portfolios towards defensive securities.
Property for Industry led gainers, and while Tower fell after shedding its dividend.
The NZX 50 Index rose 3.68 points, or 0.11 per cent, to 3429.28 as of noon. The New Zealand dollar recently traded at US77.62 cents, little changed from US77.67c at 8am, but up from US77.21c at 5pm yesterday.
As of noon 8.9 million shares had changed hands, with a turnover of $27.3 million, with trading marked by small but broad lots rather than interest in clear stand outs.
Australia's S&P/ASX 200 Index rose 0.3 per cent to 4085.4, while Japan's Nikkei 225 Index rose 0.46 per cent to 8575.65, as modestly upbeat sentiment from Wall Street flowed through into the Asia Pacific trading day.
Property for Industry, the commercial and industrial real estate investor, rise 2.6 per cent to $1.17. The stock is rated as "sell" according to a Reuters poll of four analysts with a median target price of $1.10.
AMP NZ Office, the specialist investor in office property, rose 1.1 per cent to 96c. Goodman Property Trust, one of the country's biggest real estate investors, rose 1 per cent to $1.01.
Vital Healthcare, the specialist investor in medical clinic real estate, rose 0.8 per cent to $1.21.
Property investment companies and trusts are regarded by some investors as defensive equity plays, as the stocks are underpinned by the value of their property assets.
Nuplex, the industrial chemical and resin maker, rose 2 per cent to $2.50, while Fisher & Paykel Appliances rose 1.9 per cent to 54c.
On the other end of the ledger, decliners were paced by a number of companies who shed their dividends today.
Tower, the insurance company, fell 4.2 per cent to $1.60 after shedding its interim 5 cents per share dividend.
Restaurant Brands, the fast food franchise operator, fell 4.2 per cent to $2.06 after it went ex-dividend, with investors due a 9.5c per share final payment.
Heartland New Zealand, the would-be retail bank, fell 1.9 per cent to 51c.
SkyCity Entertainment, the casino and hotel operator, fell 1.7 per cent to $3.47 after the auditor-general's office launched an investigation into the company's agreement to build a $350m convention centre in Auckland in exchange for more lenient gambling rules.
- © Fairfax NZ News
US STOCKS-Wall Street bounces on cue from Spanish yields - Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
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CANADA STOCKS-TSX rallies on gold miners, Bombardier - Reuters UK
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Stocks edge higher on overseas leads - Sydney Morning Herald
Australian stocks have opened slightly higher following gains on Wall Street and European markets.
At 1020 AEST on Wednesday, the benchmark S&P/ASX200 index was up 9.4 points, or 0.23 per cent, at 4,082.3, while the broader All Ordinaries index was up 9.2 points, or 0.22 per cent, at 4,127.5.
IG Markets analyst Stan Shamu said that while there were positive leads from US and European markets overnight, investors were still cautious in the lead-up to the Greek elections on June 17.
‘‘We will probably continue to see some cautious trading even if there’s good news. People have still got it in the back of their head that the Greek elections are coming up,’’ he said.
‘‘It will definitely be a major event.’’
US stocks bounced back overnight, reversing the previous day’s losses while shrugging off the spectre of more turmoil in Europe.
Commodities, industrial equipment makers and banks led the market higher, while United Technologies was the Dow’s only loser, falling 0.3 per cent after announcing a new $US1.0 billion ($A1.01 billion) capital raising move.
At the close, the Dow Jones Industrial Average was up 162.57 points (1.31 per cent) to 12,573.80.
Almost all major European stock markets closed higher after mixed trading, while the euro was steady as enthusiasm over a massive Spanish bank bailout faded.
At the close of trading, London’s FTSE 100 index of leading companies had gained 0.76 per cent to 5473.74 points, Frankfurt’s DAX 30 was up by 0.33 per cent at 6161.24 and Paris’s CAC 40 added 0.14 per cent to 3046.91.
In local economic news on Wednesday, the Westpac/Melbourne Institute Survey of Consumer Sentiment was up 0.3 per cent at 95.6 index points for June.
The mining giants all opened higher.
BHP Billiton was up 27 cents to $31.99, Rio Tinto was up 45 cents to $55.10 and Fortescue Metals was up eight cents to $4.63.
The major banks were mixed.
ANZ was up five cents to $21.82, National Australia Bank was 10 cents higher at $22.32 and Westpac was six cents higher at $20.63.
But, Commonwealth Bank was two cents lower at $50.80.
National turnover was 274 million securities, worth $437 million, with 312 up, 226 down and 277 unchanged.
What you need to know
- The $A was trading at 99.6 US cents
- In the US, the S&P500 added 1.17% to1324.18
- In Europe, the FTSE100 added 0.76% to 5473.74
- Gold added 1.1% to $US1613.80 an ounce
- WTI crude oil added 62 US cents to $US82.32 a barrel
- RJ/CRB commodities index added 0.04% to 270.86
- Australian business press digest: June 13
Bonds
Spanish borrowing costs jumped to the most in the history of the euro as European government bonds slumped on concern policy makers aren’t doing enough to prevent the currency bloc’s financial woes from deepening. The yield on Italian 10-year securities jumped to the most since January as the country prepared to sell bonds on June 14.
- Spain’s 10-year yield rose 20 basis points, or 0.2 percentage point, to 6.71%, after reaching 6.83%, the highest since the euro was introduced in 1999
- Italian 10-year securities dropped for a fifth day. The yield increased 14 basis points to 6.17%
- German bunds declined, with the 10-year yield rising 12 basis points to 1.42%
Treasuries fell as the US sold $US32 billion of three-year notes and traders speculated that Federal Reserve officials may add to stimulus to keep the economic recovery from faltering.
- US 10-year note rose eight basis points to 1.66%
United States
US stocks advanced, rebounding from yesterday's decline, amid speculation the Federal Reserve will take steps to stimulate the economy and after the European Central Bank endorsed a plan to guarantee bank deposits.
Key numbers:
- S&P 500 added 1.2% to 1324.18
- Dow Jones Indus Avg added 1.3% to 12573.80
- Nasdaq composite added 1.19% to 2843.07
Europe
European stocks rose for the first time in three days on speculation that the Federal Reserve will opt for more stimulus, outweighing a surge in Spanish borrowing costs to a euro-era record.
Key numbers:
- London’s FTSE 100 added 0.76% to 5473.74
- In Frankfurt the DAX 30 added 0.33% at 6161.24
- In Paris the CAC 40 added 0.14% to 3046.91
Asia
Asian stocks fell, with the regional benchmark index retreating from a two week high, as surging Spanish bond yields stoked concern that a bailout for the nation’s banks won’t tame the European debt crisis.
Key numbers:
- MSCI Asia Pacific Index lost 0.5% to 112.9
- Japan’s Nikkei 225 lost 1.02% to 8536.72
- Hong Kong’s Hang Seng lost 0.43% to 18872.56
- China’s Shanghai composite lost 0.7% to 2289.79
Commodities
Energy
Oil prices closed mixed amid rising speculation over OPEC’s likely action on production quotas when it meets in Vienna this week.
- New York’s main contract, light sweet crude for delivery in July, which hit an eight-month low of $US81.07 a barrel in earlier Asian trading, on Tuesday settled at $US83.32 a barrel, up 62 US cents from Monday’s closing level
- In London trade, Brent North Sea crude for July however shed 86 US cents to stand at $US97.14 a barrel
Precious metals
Gold held above $US1,600 an ounce, as a weaker US dollar and talk of further monetary easing drew investors seeking safety into the gold market.
The most actively traded contract, for August delivery, gained 1.1 per cent, or $US17, to settle at $US1,613.80 per troy ounce on the Comex division of the New York Mercantile Exchange.
- Comex silver for July delivery climbing 1.2 per cent, or 33.3 US cents, to $US28.949 a troy ounce
- Nymex platinum for July delivery gaining 0.4 per cent, or $US5.10, to end at $US1,454.40 a troy ounce.
- Nymex palladium for September delivery, however, slipped 0.1 per cent, or 90 US cents, to settle at $US624.25 a troy ounce
Base metals
Base metals closed mostly lower on the London Metal Exchange (LME), as dovish comments by the Chicago Federal Reserve Bank president failed to distract from persistent concerns over the situation in the euro zone.
- At the PM kerb close on Tuesday, LME three-month copper was 0.3 per cent lower at $US7,395 a metric ton
- Aluminum closed at $US1,967.50/ton, down 0.2 per cent on the day
How we fared yesterday
Australian shares eked out a small gain today, as a firmer banking sector helped offset weaker resource stocks weighed down by a slide in oil and copper prices.
The benchmark S&P/ASX200 index rose 9.2 points, or 0.2 per cent, to 4072.9, while the broader All Ords gained 7.2 points, or 0.2 per cent, to 4118.4.
BusinessDay with agencies
Brazil stocks aim for win; Chile rate seen on hold - Marketwatch
By Carla Mozee, MarketWatch
SAN FRANCISCO (MarketWatch) — Brazilian stocks rose Tuesday, erasing the previous session’s losses, while Chile’s currency and stocks pulled lower after a survey showed analysts widely expect the country’s benchmark interest rate to remain on hold this year.
Brazil’s Ibovespa /quotes/zigman/1467794 BR:BVSP +1.94% rose 1.9% to 55,049.03, with retail and consumer-discretionary stocks leading sector gains. Advances came in part after news that policy easing by China, Brazil’s largest trading partner, fueled an acceleration in bank lending last month. Read about May's acceleration in Chinese bank lending.
On Tuesday, shares of TAM /quotes/zigman/410380/quotes/nls/tam TAM +8.70% /quotes/zigman/1490833 BR:TAMM4 +6.84% topped price performers, up 6.8% after Chile’s LAN Airlines /quotes/zigman/220789/quotes/nls/lfl LFL +2.03% extended by 10 days a share swap related to LAN’s takeover of TAM. Shares of LAN CL:LAN +3.32% /quotes/zigman/220789/quotes/nls/lfl LFL +2.03% traded in Santiago reversed course and closed up 3.3%.
Among volume leaders, miner Vale /quotes/zigman/553117/quotes/nls/vale VALE +1.69% rose 2.3% and oil producer Petrobras /quotes/zigman/265276/quotes/nls/pbr PBR +0.16% picked up 1.1%.
Moscow marches against Putin
Thousands of Russian opposition protesters march against President Vladimir Putin and the government crackdown on dissenters. (Video courtesy of Reuters)
The index tracking 68 issues on Monday fell 0.8%, snapping two sessions of advances, hurt in part by a decline in expectations for growth in Latin America’s largest economy. A survey from Brazil’s central bank put the consensus estimate for 2012 growth at 2.53% from last week’s reading at 2.72%. Analysts also cut their forecast for 2013 to 4.3% from 4.5%.
“The next shoe to drop is the consensus view on [interest] rates. Weaker growth means lower rates,” analysts at BNP Paribas said Tuesday.
Brazil’s key rate is currently at record low of 8.5%. The rate could be cut to 7.5% this year — with two half-percentage point reductions in July and August — or to be reduced “even lower, if an external ‘extreme event’ materializes,” they said.
In Chile on Tuesday, a monthly central bank survey showed economists expect policy makers to hold the benchmark interest rate at 5% throughout 2012. The rate was last cut to that level in January.
Analysts also lowered their expectations for domestic economic growth this year, leaving the growth estimate at 4.7% compared with 4.8% previously.
The release of the survey came ahead of a rate decision expected late Thursday.
Bolstering expectations for the benchmark interest rate to hold steady, consumer prices were unchanged in May, according to Chile’s INE statistics agency last week. Analysts had widely expected prices to rise. Inflation on a 12-month basis to a 10-month low to 3.1% from 3.5% in April.
“Favorable” inflation results in the last two months gives the central bank room to cut the key rate if necessary, said economist Felipe Hernandez at RBS in a note Monday.
“Notwithstanding, the central bank is unlikely to lower the monetary policy interest rate in the near term, as domestic demand maintains positive momentum and economic growth remains close to the long-term trend,” he said.
Deteriorating external conditions increase risks for the Chilean economy, “but we still believe in a more reactive than proactive central bank,” and expect authorities to “wait until having more information before making any adjustment,” Hernandez said.
Chile’s currency /quotes/zigman/4872249/sampled USDCLP 0.0000% fell against the U.S. dollar, with the greenback buying 504.62 pesos, up from 503.52 pesos on Monday.
Chile’s IPSA equity index CL:IPSA -0.56% fell 0.6% TO 4,281.82. Stocks fell 1% in the previous session, breaking three days of gains.
In Mexico City, the IPC equity index MX:IPC +0.64% closed Tuesday’s session up 0.6% at 37,271, while Argentina’s Merval AR:MERV -0.06% slipped 0.1% to 2,178.26.
























US STOCKS-Wall St bounces, takes cue from Spanish yields - Reuters UK
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
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Krishna seeks to reassure U.S. business - YAHOO!
WASHINGTON (Reuters) - External affairs minister, S.M. Krishna, on Tuesday sought to reassure frustrated U.S. business leaders that India is committed to economic reforms after recent government decisions that have left them questioning future investments.
"In an era of global interdependence, not everything is within the powers of national governments. But we are confident we will restore investor confidence and regain momentum and growth," Krishna said in a speech ahead of a meeting on Wednesday with U.S. Secretary of State Hillary Clinton.
Regulatory uncertainty and policy gridlock have battered foreign corporate sentiment toward India, adding to a dramatic slowdown in the Asia democracy's economic growth and exacerbating a widening current account deficit that has knocked the rupee to record lows.
India's industrial output growth flatlined in April, piling pressure on policymakers to take action to revive the economic fortunes of a country that Standard & Poor's warned could be downgraded to junk status because of political inaction.
Speaking just before Krishna, White House international affairs adviser Michael Froman said U.S. companies have grown increasingly "concerned about the economic relationship, fearing that the investment environment has deteriorated, that domestic political challenges are slowly the pace of reforms."
He urged the government of Prime Minister Manmohan Singh to recommit to economic reforms and market opening "as the best way to assure our bilateral relationship continues to deepen and broaden and the best way to ensure that India's place as an emerging power remains secure."
In recent months, global business groups have raised concerns that new Indian policies on technology purchases would unfairly discriminate against foreign firms.
Proposed changes in Indian tax provisions have also sparked criticism and warnings that investment plans by overseas companies could be reconsidered. New Delhi has also backtracked on plans to open its market to big multi-brand retailers like Wal-Mart.
The "disturbing flip flops and increasing signs of an absence of predictable investment and business climate ... are hampering India's progress and scaring away foreign investment," Ajay Banga, new chairman of the U.S.-India Business Council and CEO of MasterCard Worldwide, said in a speech.
Krishna told the business group that India has gone through previous periods "where the growth seemed to lose its steam and the agenda of reform seemed to be slowing down."
"But time and again, our economy rebounded with new vigors on the strength of strong fundamentals and supported by sound policies and prudent economic management," he said.
The veteran politician said he was confident that would happen again because "virtually every party in India has been at some point part of the reform process itself."
Krishna stressed the importance to Indian economic growth of an "open and growing market" in the United States.
He also urged the Obama administration, which on Monday exempted New Delhi from sanctions on Iran's oil trade, to clear the way for India to import natural gas from the United States.
Despite current strains in the relationship, Ron Somers, president of the U.S.-India Business Council, said he hoped the two countries could finish ongoing talks on a Bilateral Investment Treaty (BIT) by the end of the year.
That would provide certain safeguards for business investors and a forum for resolving investment spats.
The business group also wants the two governments to begin talks on a free trade agreement, once the BIT is reached.
"That would be a real game-changer," Banga said.
The Peterson Institute for International Economics has been commissioned to explore the potential benefits of a free trade pact. The study is expected to be done by early 2013, in time for the next U.S administration, whether led by President Barack Obama or his Republican challenger Mitt Romney, to take up the initiative, Somers said.
(Editing by Leslie Adler and Will Dunham)
Scottish independence financial plans questioned by former FSA boss Howard Davies - Daily Record
A FORMER head of the UK's financial regulator has questioned the Scottish Government's currency and financial plans for the country under independence.
Sir Howard Davies, a former chairman of the Financial Services Authority, said the SNP position to keep a central Bank of England and the pound is unclear.
"It's not obvious quite how a system with two separate finance ministries and one central bank would work," he told BBC Radio Scotland's Good Morning Scotland.
The comment follows a speech by Finance Secretary John Swinney yesterday in which he underlined the plan to keep a "sterling zone" and the UK regulatory framework if Scots vote for independence in 2014.
Sir Howard referred to the current European Union banking crisis, arguing that its central bank is not prepared to provide money without limit.
"Supposing the Bank of England looked again at a Scottish bank and said 'It's really in trouble, people would would want it to be rescued, but we're not going to rescue it unless we're indemnified'.
"Where would they look for that indemnity? It wouldn't be the UK Treasury, presumably the English Treasury - it would have to be the Scottish Treasury.
"I don't quite know how you can be a servant of two masters, in terms of two separate treasuries and one central bank. I can't think of an analogy where that's the case."
Mr Swinney described the SNP administration's plan to a business audience in Glasgow yesterday.
In his speech, published on the Scottish Government website, he said: "A sterling zone will provide businesses both in Scotland and the rest of the UK with the certainty and stability for trade, investment and growth.
"And as the Bank of England takes on the role of regulator for UK financial services - a very sensible and long overdue position - retaining the pound will preserve the highly integrated UK financial services market.
"That framework is solid and substantial and I know that understanding our proposal is important to many of you in making your decisions about Scotland's future."
Deputy First Minister Nicola Sturgeon defended the position following Sir Howard's comments.
Asked how a Scottish institution would be bailed out, Ms Sturgeon told Good Morning Scotland: "We've covered this point previously. The Scottish Government, in that scenario, would pay the Bank of England to provide lender of last resort facilities for Scottish banks.
"The Scottish Government has made clear, the SNP's made clear, that an independent Scotland would remain within sterling."
The position is "eminently sensible", she said.
Hope for Fed help powers US stocks to big gain - Miami Herald
NEW YORK -- Stocks staged one of their strongest rallies of the year Tuesday, erasing a big decline from the day before, after a Federal Reserve official said he supported more measures to stimulate the economy.
The Dow Jones industrial average shot up 162 points, and every major category of stock in the U.S. market closed higher.
Charles Evans, president of the Fed's Chicago bank, told Bloomberg News that he supported action to produce faster job growth, including having the Fed commit to super-low interest rates until unemployment falls significantly.
Last week, Fed Chairman Ben Bernanke told a committee of Congress that he was ready to act if the economy needs it, but he laid out no immediate steps.
Investors have been worried about an escalating crisis in Europe over government debt and the health of banks, and job growth in the United States has been slower over the past three months than it was earlier in the year.
"If there's really bad news, it creates a heightened sense of anticipation that the Fed is going to ride to the rescue," said Jeff Lancaster, a prinicpal at the wealth advisory firm Bingham, Osborn & Scarborough in San Francisco.
"It's almost like you've crashed your car and you've got a $500 deductible, and you take the car to the body shop and you just have this perverse desire for the damage to be well over $500," he said.
Rob Lutts, president and chief investment officer of Cabot Money Management, said investors were looking for an excuse to buy.
"The question for Bernanke is should he add more medicine when he's already doped up the patient enough already," he said.
Materials companies, industrial companies and banks rose the most, but each of the 10 major categories of stock in the Standard & Poor's 500 climbed. Energy stocks also had an impressive day after the price of oil rose from an eight-month low.
Over the weekend, European countries committed to lend Spain up to $125 billion to save its failing banks. But on Monday, the Dow fell 142 points. Investors fretted that they did not know enough about the details.
The big rally in U.S. stocks on Tuesday came despite more discouraging signs from Europe. Spain's borrowing costs jumped for a second day, to the highest level since Spain adopted the euro currency.
The interest rate, or yield, on Spain's 10-year bond rose 0.20 percentage point to 6.67 percent. It rose as high as 6.81 percent earlier in the day. At 7 percent, economists say, countries generally can no longer finance their own debt.
The rescue loan will be funneled through the government of Spain, and investors are also worried about whether Spain will have to repay that loan before it pays its other debt.
That makes bondholders less willing to buy Spain's debt, and makes them demand a higher interest rate to compensate for the added risk that they will not be paid back first if Spain is unable to pay all its debt.
"The market needs some confidence and foreign buyers won't buy Spanish debt if they won't get paid first," said William O'Donnell, head of U.S. Treasury strategy at Royal Bank of Scotland.
Borrowing costs for Italy, which analysts fear will be the next European country to seek some kind of rescue, rose even more. They jumped 0.47 percentage point to 6.02 percent.
Investors are also nervous ahead of an election in Greece this weekend that may determine whether that country cuts itself free from the euro.
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