MARKET COMMENT: S&P/ASX 200 Likely Flat Before Aussie CPI, China PMI
24 July 2013 - 10:31AM
Dow Jones News
0001 GMT [Dow Jones] Australia's S&P/ASX 200 is likely to be
flat before the 0130 GMT release of domestic CPI data, after which
attention will turn to HSBC's flash China PMI data at 0145 GMT.
Having digested comments reported Tuesday from China's Premier Li
Kequiang that the economy can't be allowed to slip below the 7%
growth level, the Australian market has no strong catalyst for
further gains. However, commodity prices were slightly positive,
with gold, oil, iron ore and copper up 0.1%-0.7%, while BHP
(BHP.AU) ADRs rose 1.1% to A$34.88. Domestic CPI data may solidify
expectations of a rate cut next month if core CPI is below the
consensus 0.4% increase. While a rate cut is largely expected by
the market, lower interest rates should tend to support high-yield
and consumer-discretionary stocks. Meanwhile, growing expectations
that China is prepared to stimulate its economy to prevent a hard
landing may be tested if HSBC's flash China CPI falls below the
consensus 48.3. Telstra (TLS.AU) shares may rise after BofA ML
raised its rating to Buy from Underperform. Index last 5017.1.
(david.rogers1@wsj.com)
Write to Shani Raja at shani.raja@wsj.com
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