07 February 2006 Middle East Tensions Dampen Investor Sentiment
In New York US stocks finished slightly weaker overnight as political tension in Iran drove up energy prices, while positive analyst remarks on Alcoa Inc. and General Motors failed to inspire investors. News that Iran has stopped cooperating with U.N. officials over its nuclear arms program sparked fears about disruptions from one of the world's biggest oil suppliers. Oil prices firmed, holding above US$65 per barrel. Analysts lifted Alcoa to "overweight" on indications that the market is ignoring strong aluminum prices and their potential impact on earnings. The Dow rose 4.65 points to finish at 10,798.27 and the Nasdaq eased 3.78 points to close at 2,258.80.
UK Listed Stocks pushed higher in overnight trade as bid speculation in the retail sector outweighed an unconvincing start on Wall Street. Strength in base metal prices helped lift resource stocks, with BHP Billiton gaining 9p to £10.27 and Rio Tinto rising 23p to £28.93. The FTSE finished the session 13.1 points stronger to 5772.4.
In Currency Markets the AUD reached a 1 month low of $0.7413 overnight, as the USD strengthened across the board. The move followed an increasing belief by investors that a March FOMC interest rate rise is on the cards, and that it may not be the last. MRFX expect some buying in the $0.7400/10 area, with initial selling interest remaining as close as $0.7440/60. Overnight Markets Data UK change close FTSE +13.1 5772.4 BHP BLT +9.0p £10.27 RIO +23.0p £28.93 BIL +2.0p £4.0525
USA change close DJIA +4.65 10798.27 NASDAQ -3.78 2258.80 S&P +0.99 1265.02 NWS (ADR) +$0.39 $22.49 BHP (ADR) +$0.28 $26.13
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