Scoreboard: Greek woes

Wall Street fell after the ECB rejected Greek bonds as collateral, while a slide in oil prices hit energy shares.

In US economic data the ADP employment report showed private sector jobs lifted by 213,000 in January, mildly below expectations (225,000). The final reading of the Markit service sector PMI lifted from 53.3 to 54.2 in January.  

European shares were mostly higher on Wednesday as better-than-expected results from LVMH boosted luxury retail stocks. Shares in LVMH jumped 8.1 per cent to a record high after a lift in fourth quarter sales. The ongoing improvement in the Greek debt scenario supported the Greek banking sector. The Greek index rose by 0.9 per cent. Overall the FTSEurofirst index rose by 0.6 per cent. The German Dax rose by 0.2 per cent and the UK FTSE fell by 0.2 per cent. Mining shares fell in London with BHP Billiton down by 2 per cent while Rio Tinto fell by 0.7 per cent.

US sharemarkets were fell in late trade on Wednesday as the ECB rejected Greek bonds as collateral and the slide in the oil price hurt energy stocks. The S&P energy index lost 1.6 per cent. Walt Disney (up 7.6 per cent) kept the Dow in positive territory after reporting a better than expected quarterly profit. With just over an hour of trade, the Dow Jones was down by 16 points, or 0.1 per cent, to 17650. The S&P 500 lost 12 points, or 0.6 per cent, to 2038, while the Nasdaq Composite Index fell 18 points, or 0.4 per cent, to 4710. 

US long-term treasury prices were flat on Wednesday as expectations of a new debt deal for Greece and better data out of Europe boosted risk appetite. US two-year yields were flat at 0.51 per cent while US 10-year yields were unchanged at 1.79 per cent.

Major currencies were weaker against the greenback in European and US trade on Wednesday. The Euro fell from highs near $US1.1485 to $US1.1400 and was near $US1.1420 in afternoon US trade. The Aussie dollar fell from highs near US78.40c to US77.45c and was near US77.60c in late US trade. And the Japanese yen strengthened from 117.80 yen per US dollar to ¥117.25 and was near ¥117.30 in afternoon US trade.

World oil prices fell on Wednesday after the four prior sessions of gains. Traders focused on the ongoing lift in oil supply after the release of weekly inventory data. US crude stockpiles rose by 6.3 million barrels last week to a record 413 million barrels. Brent crude fell by $US2.99 or 5.2 per cent to $US54.17 a barrel while US Nymex crude fell by $US4.60 or 8.7 per cent to $US48.45 a barrel.

Base metal prices mixed on Wednesday. Lead managed to gain 1 per cent while nickel lost 1.2 per cent. Copper touched a two week high before closing up 0.2 per cent. The lift was driven by a move by China's central bank to cut the amount of cash that banks must holds as reserves in an effort to boost liquidity and spur growth. Gold rose with the Comex gold futures price up by $US4.20 or 0.3 per cent to $US1,264.50 per ounce. Iron ore fell by US60c or 1 per cent on Wednesday to $US61.40 a tonne.

Ahead: In Australia, retail sales and new home sales are released. In the US, trade data is expected.

Savanth Sebastian is an economist with CommSec.

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