The S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) is expected to trade firmly higher following mixed leads from international markets overnight.
Here's a recap:
- Dow Jones (USA): up 1.41%
- NASDAQ (USA): up 1.97%
- FTSE 100 (UK): down 0.72%
- DAX (Germany): down 1.67%
- EURO STOXX 50 (Europe): down 1.6%
- Shanghai Composite (China): up 1.97%
In the US, the Dow Jones rebounded into positive territory as the embattled energy sector led gains. After spending years at over $US100 a barrel, oil prices have slumped to below $US30 a barrel since mid-2014. A 2.3% jump in oil prices overnight, however, saw the USA's energy sector rebound more than 4%.
In Europe, modest rebounds in commodity prices weren't enough to overcome more concerns about the enormous automotive industry. A raid on Renault's factories saw markets exposed to carmakers, such as Germany's DAX and Paris' CAC, fall more than 1.5%. FTSE-listed shares of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) jumped 6% and 2.2%, respectively.
Closer to home, the Sydney Futures Exchange is tipping a 67-point, or 1.36%, rise in the S&P/ASX 200 at the open.
Following the modest rises in oil and iron ore prices, investors will be closely watching BHP, Rio Tinto, Fortescue Metals Group Limited (ASX: FMG), Woodside Petroleum Limited (ASX: WPL) and other major commodity producers' share prices today. Both the energy and resources sectors have underperformed the broader market in 2016.
Australia's largest iron ore miner, Rio Tinto, has frozen the salaries of all its employees and is urging staff to "cut back on all non-essential activities to preserve cash amid a protracted slump in commodity prices," Dow Jones Newswires reported from London. Year-over-year, iron ore and copper prices have fallen 70% and 20%, respectively.
National Australia Bank Ltd. (ASX: NAB) updated the market regarding its proposed demerger and initial public offering (IPO) of the Clydesdale Yorkshire Banking Group. In a statement to the ASX, NAB said its UK subsidiary had been performing as expected over the past three months and it will continue to proceed with its proposed demerger, which will see the bank listed on both the ASX and London Stock Exchange.
