Markets Live: Bad day for banks

Australian capital city housing markets had their strongest winter since before the lead up to the global financial crisis, with Sydney and Melbourne house prices lifting 5 per cent and 6. 4 per cent respectively over the three months to the end of August, according to RP Data. “The housing market is something that needs monitoring but it really doesn’t pose a major risk to the Australian economy from my perspective,” Mr Dallara told Fairfax Media from the Australian Private Equity and Venture Capital Association Alpha conference in Melbourne. “In terms of the fundamental valuations relative to income, relative to payment capacity, in the UK I think the risks are much higher.

Is a similar correction likely now? ‘‘We’re likely to have volatility in September,’’ Stuart Freeman, chief equity strategist at Wells Fargo Advisors said. ‘‘We’ve got a fundamental situation, an acceleration of growth that’s going to allow the market to move higher by the end of the year. 1:24pm: In Japan, the central bank has kept monetary policy steady and maintained its upbeat view of the economy, signalling confidence that it can meet its 2 per cent inflation target without additional monetary stimulus.

On the local market, shares are poised to open little changed ahead of retail sales and trade data after a weak lead from Wall Street. • AUD at 93. 45 US cents, 97. 88 Japanese yen, 71. 08 Euro cents and 56. • On Wall St, S&P 500 -0. 1%, Dow +0. 1%, Nasdaq -0. • In Europe, Euro Stoxx 50 +1. 2%, FTSE +0. 7%, CAC +1%, DAX +1. • Iron ore slips 1. 2% to $US85. • Australia: July retail sales and the trade balance, both from ABS at 11:30 AEST. • Europe: European Central Bank press conference at 10:30pm. • Japan: Bank of Japan monetary policy statement; Germany factory orders, Markit PMI. • Fortescue Metals says it shipped a record 15. • Origin Energy has dropped out of the auction for Infratil’s Australian energy assets and is not expected to table a final bid on September 8, sources said told the AFR‘s Street Talk column. • Noni B, BHP Billiton, Rio Tinto, Atlas Iron, BC Iron, Wesfarmers, Woolworths.

The People’s Bank of China set the midpoint rate at 6. 1666 per US dollar before the market opened, up 31 pips from the previous fix. The spot market hit 6. 1340 per US dollar, the highest level since early March, during morning trade. It closed at 6. 1411 on Wednesday. ‘‘Risk appetite has improved on signs China’s economy is still holding up, while political risks in Ukraine are receding,’’ said Daniel Chan, a Hong Kong-based analyst at Brilliant & Bright Investment Consultancy. ‘‘The yuan is still on trajectory for a gradual, mild appreciation. 12:47pm: Australian houses are expensive, sure, but the local property market prices doesn’t come near London.

Therefore, they did not form part of the relevant market even though Euromonitor estimates off-line distribution still accounts for over 64 per cent of hotel rooms booked in Australia. Wotif shares are down 3. 4 per cent at $3. 15, after posting their biggest one-day drop in 5-1/2 months. 11:23am: A cooling love affair with shares of the big four banks could free up $44 billion in investor capital, cash that will be looking for a new home over the coming months.

The BoJ has stood pat since launching an intense burst of stimulus in April last year, when it pledged to double base money via aggressive asset purchases to achieve its 2 per cent inflation target in roughly two years. 1:18pm: Meanwhile, China’s benchmark money-market rate fell the most in two months on signs the central bank will keep monetary policy loose enough to support an economic recovery.

Steel prices in China have slumped to 10-year lows amid a faltering property sector, one of the biggest drivers of growth, accounting for 15 per cent of gross domestic product last year. 9:11am: The Nasdaq Composite Index fell the most in almost a month, dragged down by losses in Apple after a competitor introduced new smartphones and the company faced criticism for the theft of celebrity photos.

Read more here: SMH


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