Saturday, February 25, 2012

Australian stock market open outlook feb 27 2012

Australian stock market open outlook feb 27 2012 : Australian stocks are expected to open flat on Monday, as investors react to Friday's downgrade of Australian banks and follow the latest developments in Canberra.

While there was a mostly positive lead from Wall Street, futures markets were pointing to a 0.2 per cent decline when Australian stocks begin trading. the bank downgrade and the upcoming Australian Labor Party leadership vote would be the focus for investors at the start of trade on Monday.

The Fitch ratings agency said on Friday afternoon it had downgraded the ratings of three of Australia's big four banks one notch, due to their partial reliance on wholesale funding markets.

Commonwealth Bank, Westpac and National Australia Bank were lowered to AA-, from AA, to reflect their weaker funding profile. Fitch reaffirmed ANZ's ratings outlook at AA-.

In equities news this week, QBE Insurance Group, Harvey Norman, Woolworths and James Hardie Industries SE are among companies due to report their latest profit results.

the February profit reporting season was almost complete, with about 90 per cent of companies having issued their results. While there have been some bright spots, overall the results are soft, with companies suffering from soft revenue growth, sticky costs and pressure from the strong Australian dollar.

Only 31 per cent of companies had exceeded market expectations, compared with 37 per cent in the June half and a norm of 45 per cent.

It is also a busy week for economics news, with the Australian Bureau of Statistics scheduled to publish retail trade, construction work and building approvals data, among other reports.

In overseas news, the European Central Bank's second tranche of three-year refinancing funds for banks is due this week, while US Federal Reserve chairman Ben Bernanke is scheduled to appear before the US Congress.

The Australian dollar ended the weekend offshore session at 106.95 US cents, down slightly from 107.17 US cents at Friday's local close.

Australian stocks finished firmer on Friday, with the benchmark S&P/ASX200 index breaking through the 4,300-point resistance level for the first time since December 2011.

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