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need2know: Oil slides, shares follow

Local shares are poised for a flat open as shares drifted lower overseas on further weakness in oil

What you need2know

SPI futures flat at 5290

AUD at 72.77 US cents

On Wall St, late, S&P 500 -0.4%, Dow -0.3%, Nasdaq -0.4%

In Europe, Stoxx 50 -0.79%, FTSE 100 -0.64%, CAC -0.52%, DAX -1.08%

In London, BHP -1.96%, Rio -0.96%

Spot gold down $US8.33 or 0.8% to $US1060.78/oz at 3.01pm New York time

Brent crude down $US1.35 or 3.6% to $US36.44/bbl at 2.36pm NY time

What’s on today

Thursday: Australia November credit.

Stocks in focus

Deutsche Bank has a ‘buy’ recommendation on Flight Centre (FLT) and a $46 target price.

Macquarie Wealth Management has an ‘outperform’ rating on Austal (ASB) and a $2.26 target price.


China has suspended at least two foreign banks from conducting some cross-border yuan business until late March, limiting their scope to profit from a widening gap between the currency’s exchange rates at home and abroad.

The US dollar’s share of allocated currency reserves rose to 64 per cent in the third quarter this year, from 63.7 per cent in the second quarter, data from the International Monetary Fund showed.

Russia’s rouble and the South African rand weakened at least 1.1 per cent versus the US dollar, leading declines in emerging currencies, which slid for a third day, driving the gauge of 20 emerging currencies 0.2 per cent lower.


“The most important things for Glencore is to keep our investment-grade rating and to find areas where we can cut production,” said director John Mack, a former chief executive officer of Morgan Stanley. “We are not backing out of trading. We are as aggressive as we have ever been in trading.” Mack said the company remained bullish on Chinese demand for commodities.

Brent crude slid back towards 11-year lows as US stockpiles swelled and Saudi Arabia reiterated a commitment to keep pumping oil. A Reuters poll estimated that data would show a 2.5-million-barrel draw in the week ended December 25, but US crude stocks rose by 2.6 million barrels.

The most-active May iron ore contract on the Dalian Commodity Exchange rose to a session high of 324.50 yuan ($US50.01) a tonne, before paring some gains to close up 2.9 per cent at 321 yuan.

United States

If the S&P 500 closes 2015 higher, it will be its fourth consecutive annual gain, while a loss would make it the worst year since 2008. The index has risen as much as 3.5 per cent in the year and was down 9.3 per cent at its low in August.

Apple was the heaviest drag on all three major indexes, falling 1 per cent. Concerns about potentially soft iPhone sales have hit the stock in recent weeks. Netflix and Amazon老域名, the S&P 500’s top two performers in 2015, were down 0.96 per cent and 0.04 per cent respectively.

“I just don’t see any upside leadership,” said Donald Selkin, chief market strategist at National Securities in New York. “I’d be happy if we ended the year right here.”

Weight Watchers soared 23 per cent, extending gains for the third day after the company launched an advertising campaign last week featuring Oprah Winfrey.


European stock markets fell on Wednesday as weak commodity prices impacted the shares of mining and energy companies. European equities are heading for their worst December since 2002, down 4.6 per cent.

The Stoxx Europe 600 Index lost 0.5 per cent at the close of trading, after the previous session’s 1.4 per cent gain. The volume of shares changing hands was 40 per cent lower than the 30-day average. Markets will shut on Friday for New Year. Some including Germany, Switzerland and Italy, will also close for New Year’s Eve, while others will have shorter trading hours.

The DAX, up 9.6 per cent in 2015, will rally 9.8 per cent to 11,792 next year, according to the average of 13 strategist projections compiled by Bloomberg. Natixis’s prediction calls for an 18 per cent surge.

What happened yesterday

The benchmark ASX 200 index closed 1 per cent higher at 5319.9, while the broader All Ordinaries lifted 0.9 per cent to 5366.4. The Santa rally so far has lifted the ASX 200 more than 8 per cent since its December 15 nadir of just over 4909. The index is now within 1.7 per cent of its position at the start of the year – 5411.

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