Australian Share Market Positive Start to 2012

Attention businesses using Australia accounting software!

The Australian share market has seen a rise on the first day of trading in 2012, with more than one per cent rise on the back of positive leads in the local bourse, boosted by the European stock markets and the rallying in commodity prices during the long weekend in Australia.

For the first time in a week, the Australian shares have risen as the materials sector led broad-based gains after the official positive manufacturing PMI data out of China for December beat market expectations, helping boost risk appetite, helping resources, and energy stocks.


Gains on shares were posted across the market after the better-than-expected German manufacturing data helped European markets spread more holiday cheer, though the volumes remained low.

Also cited as positive factors by traders were the hopes of policy easing in China and a slight calming of European jitters  although in the week ahead, the market is expected to face several major events.

A rise of 1.1 per cent to 3.7 per cent was seen on shares of BHP Billiton, Rio Tinto, Newcrest Mining, and Fortescue Metals after China's PMI rose to 50.3 against the 49.0 expected by economists.

Moreover, an increase of 0.8 per cent to1.7 per cent was seen on major banks, which is said to have been helped by an improved risk appetite after Europe's STOXX 600 has increased by 1.1 per cent and Germany's DAX advanced 3 per cent.

According to Dow Jones Newswires technical analysis, the S&P/ASX 200 index looks poised to rally to the 4200-4270 area this week.

The benchmark S&P/ASX 200 index closed up 1.1 per cent at 4101.2 after hitting a three-day high of 4108.1 intraday.

Meanwhile, the Australian dollar has made a positive start to 2012 as it posted a record high against the euro and touching a one-month peak against the US dollar as positive manufacturing data from China boosted investor sentiment.

At 5.00pm AEST, the Australian dollar was seen trading at 102.90 US cents, which is up 1.3 per cent from Friday's local close of 101.62 US cents.

According to Iress data, during the day, there was a currency movement between 102.17 US cents and 102.99 US cents.

Australian Stocks Hits two-week Low over Europe Recession Fears

Attention customers of Australia accounting software and accounting software providers alike!

As poor data out of Asia and the bad news of the growing outlook of a recession in Europe are sending investors running for cover, the Australian stocks dropped to a two-week low.

Stocks have been closing lower for the fifth day out of six after more dismal news comes from Europe overnight which saw an increase of Italian bond to a euro-era record, which then has triggered a sharp selloff in commodities as investors were rushing to the perceived safe haven of the dollar.


Data revealed that China's manufacturing sector has continued to contract in December as exports slowed compounded fears that the euro zone debt crisis is already slowing growth in Asia.

According to CMC Markets sales trader Ben Taylor, a feeling of nowhere to hide at the moment is rampant among investors. And the once promised safety of gold has been hijacked in US dollar strength. US bonds in return give you little to no real return and equity markets are quickly losing their appeal.

At the close today, the benchmark S&P/ASX200 index has dropped by 50.7 points, or 1.2 per cent, at 4,139.8, while the broader All Ordinaries index lost 52 points, also 1.2 per cent, to 4,197.8.

On the ASX (Australian Securities Exchange) 24, the March 2012 share price index futures contract cut down 48 points or 1.2 per cent to 4,116, with 37,911 contracts traded while the December share price index futures contract, which expired at midday, dropped 26 points to 4,153.

Leading the market lower are the miners and energy stocks as the resource-heavy ASX became the worst performing index in the region.

The worst performers were the gold miners, shedding 3.8 per cent.

A 2.9 per cent to $30.88 loss was attributed to Newcrest Mining while BHP Billiton has showed a drop of 64 cents, or 1.8 per cent, at $35.06. The Rio Tinto shed $1.76 to hit $61.40.

According to IG Market's market analyst Stan Shamu, the huge drop in gold over the past few days has broken several support levels on the way down and if there is a break lower, there could be assumption that the gold super-cycle is over.

In Sydney, the price of gold was at $US1,567 by 1651 AEDT; down $US72.83 from Wednesday's local close of $US72.83.

Furthermore, banks have suffered a hit as ratings agency, Fitch, downgraded major French banks Credit Agricole and Rabobank on the back of escalating problems in Europe, along with France's Banque Federative du Credit Mutuel Denmark's Danske Bank and Finland's OP Pohjola Group.

Meanwhile, on the local state, National Australia Bank chairman Michael Chaney has united with Westpac this week in giving out a warning that Europe's debt crisis is pushing up the costs of funding for banks and the problem is far from over.

The warning came as NAB closed down 38 cents, or 1.6 per cent, at $23.48.

Westpac has also showed a drop of 34 cents at $20.46, while Commonwealth Bank was down 75 cents at $48.63 and ANZ was down 19 cents at $20.78.