News: Outlook: ASX set to spike on China stimulus

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The Australian share market looks ready to rebound into the new week following its biggest weekly loss since May last year. The SPI is pointing to strong gains after Wall Street posted its fifth straight weekly gain while the Dow and S&P 500 finished at closing records on Friday. Traders were given a boost by China’s central bank deciding to lower its benchmark lending and deposit rates. Buying was also fuelled by a pledge from the European Central Bank’s President to take action to raise inflation and inflation expectations as soon as possible. On the local front it will be a quite day and week ahead for economic releases amid a number of company annual general meetings which are due to take place. 

 

Global markets

 

Wall Street advanced 1.2 per cent over last week and also ended Friday higher: The Dow Jones Industrial Average gained 0.5 per cent to close at 17,810, the S&P 500 gained 0.5 per cent to close at 2,064 and the Nasdaq gained 0.2 per cent to close at 4,713.

 

European markets shot up 4 per cent over last week and ended stronger on Friday: London's FTSE 100 rose 1.1 per cent, France's CAC 40 climbed 2.7 per cent and Germany's DAX jumped 2.6 per cent.

 

Asian markets traded mixed over last week but gained ground on Friday: Japan’s Nikkei added 0.3 per cent, Hong Kong’s Hang Seng added 0.4 per cent, and China’s Shanghai Composite added 1.4 per cent.

 

The Australian share market declined 2.8 per cent over the week: The S&P/ASX 200 index fell 12 points on Friday, widening the weekly loss of 150 points to finish the week at 5,304. On the futures market the SPI is 52 points stronger. 

 

Currencies 

 

The Australian dollar at 8:15am was buying $US0.8678, 55.51 Pence Sterling, 102.35 Yen and 70.21 Euro cents.

 

Company news 

 

Expectations are running high ahead of the Australian Government’s highly anticipated float of Medibank Private Limited (ASX:MPL) which will debut on the Australian Securities Exchange tomorrow. The initial public offering raised $5.68 billion for the government with 60 per cent of shares allocated to retail investors at $2 each while institutional investors will pay $2.15 per share. The health insurance company will start trading on the ASX tomorrow at 12pm Australian Eastern Daylight Time (AEDT) under the ticker code MPL. 

 

The IPO market has been running hot this year and Pacific Smiles Group Limited (ASX:PSQ) posted a healthy debut on Friday. The provider of services and facilities to dental practitioners rose 4.71 per cent on its first day of trade to close at $1.78. Bailador Technology Investments Limited (ASX:BTI) did not get off to such a great start. The investment company is focussed on the IT sector and lost 4 per cent on its debut to finish at $0.96 on Friday. 

 

Commodities 

Gold has gained $6.80 to $US1,198 an ounce for the December contract on Comex. 

Silver has risen $0.26 to $16.40 for December. 

Copper has gained $0.04 to $3.03 a pound.

Oil has lifted $0.66 to $US76.51 a barrel for January light crude in New York.