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Category: Stockmarket / Currency / Markets / Futures

Australian shares set for quiet day on back of Thanksgiving holiday

Friday, 25 Nov 2016 05:35:22 | Rebecca Hyam

All the action overnight was in Europe, with Germany's DAX up 0.25 per cent. (Kai Pfaffenbach, file photo: Reuters)

The Thanksgiving holiday in the United States meant Wall Street did not trade overnight, so all the market action took place in Europe.

Markets at 7:45am (AEDT):

  • ASX SPI 200 futures +0.3pc 5,514
  • AUD: 74.06 US cents, 59.47 British pence, 83.92 Japanese yen, 70.09 euro cents, $NZ1.057
  • US: Closed
  • Europe: Euro Stoxx +0.25pc to 326.14, FTSE +0.17pc to 6,829 DAX +0.25pc to 10,689
  • Commodities: Gold -0.37pc to $US1,183.20/ounce, Brent crude oil -0.18pc to $US48.86/barrel, iron ore +1.4 to $US77.50/tonne

The European Central Bank warned about rising risks to financial stability in the eurozone, noting that political shifts in both Europe and the United States could lead to a surge in government borrowing costs.

The ECB's vice president Victor Constancio also said the central bank would be closely watching Italy's constitutional referendum next month.

There are concerns that Italy's pro-euro Prime Minister Matteo Renzi may not get his constitutional reforms through and would be forced to resign.

"It's the sort of political uncertainty that will trigger or not an economic shock in financial markets, and depending on the degree of that shock, then we have to see if we have anything to do or not," Mr Constancio said after presenting the ECB's bi-annual report on financial stability.

The ECB is due to meet a few days after the referendum to deliberate on the duration of its bond-buying economic stimulus program.

In corporate news, the world's largest wind power company Vestas surged 5.2 per cent, after Credit Suisse raised its price target on the firm.

Its share price had tumbled more than 20 per cent, after climate change-sceptic Donald Trump won the US presidential election, creating some uncertainty about US energy and renewables policies.

Domino's Pizza enjoyed solid gains, rising 3.2 per cent, after confirming it would step up its plans to expand, following a strong performance from new outlets and a positive market outlook.

Domino's said it was aiming to increase its presence across Britain to 1,600 stores.

But British real estate agency Countrywide slumped 12 per cent to a record low, after warning again that its 2016 core earnings would be hit by lower property market activity, in the aftermath of Britain's vote to leave the European Union.

A number of companies traded ex-dividend in London, and that limited the market's gains.

The local share market is set to open slightly higher, with the ASX SPI 200 up 0.3 per cent to 5,516.

The Australian dollar rallied overnight and, at 7:45am (AEDT), it was buying 74.06 US cents.

NAB currency strategist Rodrigo Catril wrote in an economic note that firmer commodity prices gave the local currency a boost.

"The AUD is back trading above 74 US cents, after trading to a low of 73.65 US cents overnight," he wrote.

"Support for the currency appears to have been driven by another solid night for commodities: iron ore gained 1.4 per cent to $US76.90, steaming coal was up 2.6 per cent, and copper - a bellwether for the global economy - rose 2.2 per cent."

West Texas crude oil was steady at $US46.47 a barrel, the price of a barrel of Tapis was higher at $US49.63 and spot gold had edged down to $US1,183.20 an ounce.

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