Market Update: ASX Opens Lower, as Dollar Edges Higher

The ASX opened lower this morning, despite strong gains on US markets overnight. Markets had expected to recoup some of the $35 billion lost yesterday. The ASX finished Thursday trade on 5,095, down 126.1 points for the day.

Those losses continued this morning, with the ASX 200 down 13 points to 5,082. And it came in contrast to futures markets, which were up 19 points to prior to open this morning. There was optimism gains in the US would carry the ASX higher.

US markets rose on strong gains among tech stocks. Apple [NASDAQ:AAPL] led the way, with shares up 2.2%. The company announced new versions across all major product lines. It showed off a new smartphone, tablet and revamped Apple TV.

Biotechnology firm Gilead [NASDAQ:GILD] was another big winner. Its shares were finished on US$3.43, up 3.3%.

Overall, the tech based Nasdaq rose 39.72 points to 4,796.25 on Thursday, up almost 1%.

Meanwhile, the Dow Jones rose 76.83 points. The S&P 500 was up too by 10.25 points.

Across the Atlantic, European shares were down across the board. European markets fell for the first time this week. Investors remained concerned about weak global growth.

The FTSE 100 lost 1.8%, as UK growth forecasts were revised down. Meanwhile Germany’s DAX finished 0.9% lower.

In Asia, the Shanghai Composite Index was down 1.39% for the day. The Tokyo Stock Exchange was also down, shedding 2.51%. Like Europe, Asia is worried about global growth. But it also has US interest rates on its mind.

In fact all markets are on edge in the lead up to next week’s decision on US interest rates. Asian markets worry in particular. They fear a rate hike could dampen growth across emerging economies.

A Bloomberg survey of economists shows a rate rise could be on the way. But that’s in contrast to futures traders, who have decreased odds from 38% to 28%.

Either way the uncertainty is keeping markets on edge ahead of next week’s decsision.

Aussie dollar up on jobs data

In other markets news, the Aussie dollar is trading at US$0.7076 at 9:30am AEST. It did reach a two week high of US$0.71 early this morning.

The gains came following figures showing unemployment fell to 6.2% in August. The economy added 17,400 jobs during the month, bettering expectations. But markets weren’t as lifted by that as you might think. Falling participation was a key factor in lower unemployment.

In the long term, the dollar’s is heading in one direction only.

Commonwealth Bank [ASX:CBA] and Westpac [ASX:WBC] cut forecasts for the dollar for 2015. The two banks say the Aussie will fall to US$0.66 by the end of the year.

Elsewhere, the Aussie is mixed against other major currencies this morning.

The dollar gained 0.04% against on the Japanese yen, buying 85.42 yen.

Meanwhile, the dollar is down against the Euro. It slipped 0.1% to €0.626.

Elsewhere in Europe, the Aussie is up against the British pound. It was buying £0.458 at 10:00am, up from £0.457.

Finally, the Aussie fell 0.33% against the NZ dollar. At 10:00am it was trading at $1.12.

Mat Spasic,

Contributor, Markets and Money

PS: The Aussie share market had its worst month since 2008 in August. The ASX lost 9% of its value, shedding more than $70 billion.

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He’s convinced the ASX will lose as much as 90% of its market cap in the coming months.

Vern is the award-winning Founder of the Gowdie Family Wealth and The Gowdie Letter advisory services. He’s ranked as one of Australia’s Top 50 financial planners.

Vern wants to help you avoid this coming wealth destruction. That’s why he’s written this free report ‘Five Fatal Stocks You Must Sell Now’. As a bonus, Vern will show you which five blue chip Aussie companies could destroy your portfolio. You almost certainly own one of them…

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Markets and Money offers an independent and critical perspective on the Australian and global investment markets. Slightly offbeat and far from institutional, Markets and Money delivers you straight-forward, humorous, and useful investment insights from a world wide network of analysts, contrarians, and successful investors.

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