Flood of results to set the tone for trading

AUSTRALIAN shares are expected to open in positive territory this morning as investors focus on a key week for company earnings following some better than expected profit results.

By InvestSMART · 20 Aug 2012

By InvestSMART ·
20 Aug 2012

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AUSTRALIAN shares are expected to open in positive territory this morning as investors focus on a key week for company earnings following some better than expected profit results.

The ASX 200 futures index was up five points at 4335 on Sunday, pointing to a reasonable start.

The CommSec economist Craig James expects some fairly tame trade, with no key local data to be released while the holiday season in Europe and the US bubbles along.

"Investors have been encouraged by the local earnings season so far because it hasn't been as bad as expected," Mr James said. "This is the key week for profit results so we'll get a good idea about where the economy stands after hearing from the major companies."

There was a reasonable expectation that stocks would remain buoyant following strong runs in Europe and the US, he said.

Apple shares hit an all-time high on Friday as US stocks closed out the week with a second day of solid gains that put the Dow Jones index at its highest level since 2007.

In Europe, London's FTSE 100 index closed 0.31 per cent higher at 5852.42 points and in Frankfurt, the DAX 30 added 0.64 per cent to 7040.88 points.

At the close on Friday, the ASX 200 index was up 39.9 points, or 0.92 per cent, at 4370.1, while the All Ordinaries index was up 40.3 points, or 0.93 per cent, at 4393.8.

AMP Capital's head of investor strategy, Shane Oliver, said the focus would be on company profit results. The profit-reporting season moves into its busiest week with results from 87 companies including BlueScope, Amcor, Oil Search, AGL, BHP, Coca-Cola, CSL, Woodside, Fortescue, IAG and Woolworths.

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Frequently Asked Questions about this Article…

What is the expected ASX 200 opening and what do futures indicate for trading?

ASX 200 futures were up five points at 4,335 on Sunday, which the article says points to a reasonable, positive start for Australian shares as investors head into a key week for company earnings.

Why is this week important for earnings season and investors?

The article describes this as the key week for profit results, with the profit-reporting season moving into its busiest week; results from dozens of major companies will give investors a clearer idea of where the economy stands.

Which major Australian companies are reporting profit results this week?

The article lists 87 companies reporting, including BlueScope, Amcor, Oil Search, AGL, BHP, Coca‑Cola, CSL, Woodside, Fortescue, IAG and Woolworths as some of the major names investors will be watching.

How have local earnings results been so far and what does that mean for investors?

CommSec economist Craig James says investors have been encouraged because the local earnings season so far hasn’t been as bad as expected, which has helped sentiment heading into more profit announcements.

How are global markets affecting Australian share sentiment?

Strong runs in the US and Europe are helping buoy sentiment locally — the article notes Apple hit an all‑time high and the Dow was at its highest since 2007, while major European indexes also closed higher, supporting optimism for the ASX.

What are economists saying about likely market activity this week?

CommSec’s Craig James expects fairly tame trade because there’s no key local data scheduled and the holiday season in Europe and the US may keep activity subdued, while AMP Capital’s Shane Oliver says the focus will be on company profit results.

How did Australian indexes finish last Friday and what does that suggest?

At Friday’s close the ASX 200 was up 39.9 points (0.92%) at 4,370.1 and the All Ordinaries was up 40.3 points (0.93%) at 4,393.8, indicating recent positive momentum ahead of the busy profit‑reporting week.

What should everyday investors watch during the profit‑reporting week?

Everyday investors should track the major company profit results named in the article (like BHP, Woolworths, CSL and others), because these results will help show how businesses are tracking and give a clearer picture of the economy amid broader global market moves.