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Sunday, September 2, 2012

Australia Stock Market outlook for sept 3-7 2012

Australia Stock Market outlook for sept 3-7 2012 : A raft of economic data from Australia and overseas could result in volatility in the domestic market this week. AMP Investments chief economist Shane Oliver says while the September share price index futures contract suggests the market will open 24 points higher on Monday, he believes the hike will be more in the range of 10 to 15 points.

US and most European shares closed higher on Friday after a speech by US Federal Reserve chairman Ben Bernanke left open the possibility for new stimulus measures.

In the US, the Dow Jones Industrial Average added 90.13 points (0.69 per cent), closing at 13,090.84.

In Europe, Frankfurt's DAX 30 surged 1.09 per cent to 6,970.79 points and Paris' CAC 40 gained one per cent to 3,413.07 points at the close on Friday.

London bucked the trend, with the FTSE-100 slipping 0.14 per cent to 5,711.48 points.

Mr Oliver said the Australian market would get some benefit from Bernanke's much-awaited endorsement of more US Federal Reserve stimulus.

But he said it would also be negatively impacted by Chinese PMI figures released on the weekend which showed manufacturing contracted to 49.2 in August.

The week ahead could be volatile for the Australian market with both international and domestic economic data releases and events possibly causing shifts in the domestic market.

"I expect will see some nervousness over the next week because there's so much data coming out both internationally and Australia and a lot of it could go either way," he said.

"It could be a fairly volatile ride."

Internationally the European Central Bank meets on Thursday and investors will be awaiting any indication that it will start buying bonds to stabilise Italian and Spanish bond yields.

Domestically, the Reserve Bank of Australia meets on Tuesday but is expected to keep interest rates on hold at 3.5 per cent.

The following day the Australian Bureau of Statistics will release the latest gross domestic product (GDP) figures, a measure of the size of the national economy.

AAP's survey of 15 economists revealed a median forecast for GDP to have grown by 0.8 per cent in the quarter.

However, Mr Oliver said he believed it would be 0.6 per cent growth.

Australian jobs, retail trade and housing figures are also due out this week.

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