Morning traders. Thanks Shants and after-market regulars.
Market wrap:
Australian share futures were this morning pointing lower amid speculation that Greece will miss an 8am Australian EST deadline to repay debt and institutional investors will unwind some of yesterday's financial-year-end rally on the ASX.
The September SPI200 futures contract retreated 28 points or 0.6% to 5369 despite a cautious overnight rebound on Wall Street. An open around those levels would erase most of yesterday's rally of 36 points or 0.67% on the ASX/S&P 200 on the last trading session of the financial year.
US stocks staged a cautious rebound from their heaviest fall of the year ahead of this morning's deadline for Greece to repay the International Monetary Fund US$1.7 billion. The S&P 500 rose five points or 0.27% but closed well off its session high after Greece's creditors rejected last-minute requests for financial assistance. The Dow gained 23 points or 0.13% and the Nasdaq 28 points or 0.57%.
"Probably the market still has in the back of its mind the idea this is all a bit of a game and eventually they'll come with some sort of accommodation to avoid a worst-case scenario," Darren Williams, AllianceBernstein's senior economist for Western Europe, told
Reuters. "There is a certain complacency."
Greece made a series of last-ditch efforts overnight to avoid defaulting on this morning's scheduled repayment, but met a brick wall. The government sought a new bailout program, more emergency funding from the European Central Bank and an extension from the IMF on its debt. Both Eurogroup President Jeroen Dijsselbloem and German Chancellor Angela Merkel said there would be no negotiations until Sunday's Greek referendum on the last bailout offer. A euro-zone official told Reuters the Eurogroup would not release funds for Greece to meet this morning's deadline. Ratings agency Fitch followed Standard & Poor's in downgrading Greek sovereign debt overnight.
European stocks ended their worst quarter in three years with further declines as the prospects of a late compromise deal diminished. The Stoxx Europe 600 fell 1.26%, Germany's DAX 1.25%, France's CAC 1.63% and Britain's FTSE 1.5%.
Biotechs were among the standouts in the US. The Nasdaq Biotechnology Index rallied 2.22% and the iShares Nasdaq Biotechnology ETF 2.33%.
BHP fell 2.44% and Rio Tinto 1.97% in US trade as iron ore dropped back below US$60 a ton. Spot iron ore for import to China yesterday fell $1.20 to US$59.30 a dry ton.
Energy stocks lifted 0.7% as crude oil recovered. West Texas Intermediate crude oil for August delivery settled $1.14 or 2% higher at US$59.47 a barrel.
The NYSE Arca Gold Bugs index declined 0.88% as gold failed to benefit from the Greek drama. Gold for August delivery settled $7.20 or 0.6% weaker at US$1,171.80 an ounce.
Nickel bounced from Monday's six-year low, but most base metals lost ground. In London, nickel rallied 1.1%. Copper fell 0.4%, aluminium 0.6%, lead 1.3%, tin 3.3% and zinc 0.9%. US copper for July delivery was recently off 0.55% at US$2.62 a pound.
The dollar was this morning buying 77.13 US cents.
TRADING THEMES TODAY
GREEK DEFAULT?: A tricky day ahead with so many different themes and cross-currents that it would take a much smarter man to chart a course for our index. Greece may be in technical default by the time the market opens, or there may be a classic last-minute European fudge. Have markets fallen enough for it to matter? The ASX staged a modest rally yesterday, but our futures suggest that much of that was end-of-quarter/financial year window dressing that will evaporate this morning. On any 'normal' day we'd be looking at this morning's domestic building approvals figures and Chinese factory updates to provide market direction, but these are not normal times. Keep an open mind and one eye on the news wires.
ECONOMIC NEWS: The AIG Manufacturing Index is due at 9am EST, followed by May building approvals at 11.30am. China releases June manufacturing updates at 11am (government) and 11.45am (HSBC). Tonight's US economic highlights are ADP Non-Farm Employment Change, Challenger job cuts, twin manufacturing PMIs, manufacturing prices and construction spending.
Good luck to all.
