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Overseas Market Report - U.S. Stocks End Moderately Higher on Financials Strength

Wednesday 18 January 2017 | Close

U.S. shares closed slightly higher on Wednesday after gains in financials offset weakness in telecommunications shares, but the Dow Jones Industrial Average bucked the trend to close at its lowest level of 2017.

Wednesday 18 January 2017 | Close

Foreign Equities Close Change %Change
Dow Jones (US) 19805 -22 -0.11
S&P 500 2272 4 0.18
NASDAQ 5556 17 0.31
FTSE 100 Index 7248 27 0.38
DAX 30 11599 59 0.51
CAC 40 4853 -6 -0.13
Nikkei 225 (Japan) 18894 81 0.43
HKSE 23098 257 1.13
SSE Composite Index 3113 4 0.14
NZ 50 7059 -4 -0.05

Wednesday 18 January 2017 | Close

Commodities US$ Close Change %Change
Aluminium /t 1839 37 2.04
Copper /t 5741 9 0.16
Nickel /t 10123 12 0.11
Gold /oz 1204 -9 -0.72
Silver /oz 17.0 -0.1 -0.53
Oil - West Texas crude /bbl 53.3 -- --
Lead /t 2307 15 0.63
Zinc /t 2759 57 2.12

Wednesday 18 January 2017 | Close

Currency Close Pts Change % Change
$A vs $US 0.7506 -0.0043 -0.57
$A vs GBP 0.6124 0.0030 0.50
$A vs YEN 86.09 0.88 1.03
$A vs EUR 0.7061 0.0004 0.06
$A vs $NZ 1.0530 0.0050 0.48
$US vs Euro 0.9406 0.0058 0.62
$US vs UK 0.8158 0.0086 1.06
$US vs CHF 1.0074 0.0045 0.45

U.S. shares closed slightly higher on Wednesday after gains in financials offset weakness in telecommunications shares, but the Dow Jones Industrial Average bucked the trend to close at its lowest level of 2017.

Major indexes traded within a tight range, according to media reports, as sentiment remained subdued ahead of President-elect Donald Trump's inauguration on Friday.

At the close the S&P 500 and Nasdaq were up 0.2% and 0.3%, respectively, while the Dow Jones was down 0.1%.

On the economic front, the Consumer Price Index, which is used to gauge inflationary pressure, showed that price growth accelerated in 2016 at its fastest rate since 2011. U.S. industrial output also grew last month at its strongest pace in two years.

Shares of Apollo Global Management (APO) made slight gains after it was announced the company is preparing an initial public offering for the Chuck E. Cheese restaurant chain. Apollo bought Chuck E. Cheese in 2014 and is now looking to retrieve a value of more than $1 billion for the restaurant through an IPO. According to Reuters, Apollo is also considering offers for an outright purchase of Chuck E. Cheese.

Qualcomm (QCOM) shares were back on the rise after prices dropped on Tuesday because of a complaint filed by the Federal Trade Commission against the chipmaker. The 4% drop seen on Tuesday was primarily a reaction to the FTC's allegation that Qualcomm was using anticompetitive tactics in order protect its monopoly over the supply of a key semiconductor device used in cellphones and other consumer products.

For Australian ADRs listed on the NYSE, BHP Billiton gained 78 cents (0.78%) to $40.16, ResMed lost 89 cents (-1.39%) to $63.29, Telstra Corporation lost 20 cents (-1.02%) to $19.50, Spark New Zealand slipped 13 cents (-1.03%) to $12.55 and Westpac declined 19 cents (-0.77%) to $24.48.

At 8:15 AM (AEDT), the 10-year Treasury note yield was 2.42% and the 5-year yield was 1.93%.

European markets finished mixed.

At the closing bell on Wednesday, the FTSE 100 and Germany's DAX were up 0.4% and 0.5%, respectively. The French CAC 40 declined around 0.1%.

Asian markets closed the trading session higher.

Japan's Nikkei finished the day up 0.4%. In China, the Hang Seng and Shanghai Composite indexes both made positive gains, closing up 1.1% and 0.1%, respectively. India's Sensex added 0.1%.

Australian Market

Local Markets Expected to Open Higher

Ahead of the local open, SPI futures were 8 points higher at 5,637.

Wednesday 18 January - close. The Australian market continued its losing streak by opening sharply lower, following a weak lead from the U.S. market. Heavy losses from healthcare providers and the big four banks kept the ASX index in the negative zone, offsetting gains from energy stocks. There were mixed results from the sectors: energy became the best performer for this session while healthcare lagged the rest. The Australian dollar depreciated against the greenback but gained against other major currencies.

The All Ordinaries fell 21.00 points to 5,733.70 while the S&P/ASX 200 lost 20.60 points to 5,678.80.

Incitec Pivot (IPL)

Incitec Pivot announced that as at 15 January 2017, its Waggaman Louisiana ammonia plant had produced more than 140,000 metric tonnes of ammonia since it assumed management and operation of the facility on 19 October 2016. During this period, the plant achieved 73% uptime relative to its 800,000 metric tonne p.a. nameplate capacity. As previously advised, the plant is expected to operate at an average of 80% uptime over the first twelve months of operation as it ramps up to full production, with uptime expected to improve over the course of the year as is typical for such plants. As part of the finalisation of contractual arrangements in relation to the handover of the plant, the construction contractor has agreed to pay the company an amount in final settlement of delay damages. IPL lost 3 cents to $3.56.

Wesfarmers (WES)

Wesfarmers announces the Resources business is expected to report EBIT of between $135m and $140m for the first half of the FY2017, exceeding previous guidance provided in October 2016 of a broadly breakeven EBIT for the half. The better-than-expected earnings result reflects strong production in the second quarter resulting from the implementation of recommendations from the productivity review, a new mine plan and opportunistic use of contract fleet to further increase volumes to take advantage of attractive coal pricing. Coal production for the quarter was 3.20mt, 22.5% higher than the previous quarter. Metallurgical coal production of 2.27mt was 37.9% higher than the previous quarter and steaming coal production of 0.93mt was 3.8% lower than the previous quarter. WES added 8 cents to $41.60.

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