Markets Live: Shares up but eyes on fiscal cliff
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Markets Live: Shares up but eyes on fiscal cliff

Shares close at fresh 17-months highs, but talks to avert a US fiscal crisis stall.

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Well, that's all from us here at Markets Live for 2012. A big thank you to all you readers, we hope you've enjoyed the blog as much as we have.

Best wishes and stay safe this holiday season.

We'll be back Monday January 21, 2013....We hope to see you then.

Click here for a full wrap of today's session.

Wayne Swan’s decision to jettison Labor’s commitment to get the budget into surplus next year is only a big deal for the economy and perceptions of its management if Labor does what Swan says it won’t, and attempts to buy itself another term in office.

Swan’s central proposition is correct, and for that reason there is a limit to the political mileage the opposition can extract.

As the September quarter national accounts confirmed, the economy is now running well below its long term growth trend. The annualised growth rate during the quarter was only 2 per cent, and the government’s tax receipts in the first four months of the year to June were $3.9 billion lower than estimated.

The hole has mainly been caused by lower commodity prices and competitive pressures on the economy that are partly related to the refusal of our dollar to follow commodity prices down, but Swan has taken the advice of experts including the OECD and decided against finding spending cuts or new revenue to try and fill it.

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Here's a snapshot of how blue chip stocks performed today:

  • BHP: -0.1%
  • Rio: -0.6%
  • ANZ: +0.6%
  • CBA: +0.3%
  • NAB: +0.3%
  • Westpac: +0.7%
  • Fortescue: -3.4%
  • Woolworths: +0.3%
  • Wesfarmers: +1.3%
  • Telstra: +0.2%

The dollar changed hands at $US1.0475, from $US1.0484 early, pulling away from a three-month peak of $1.0585 hit last week. The Aussie has fallen nearly 1 percent this week.

Charts show some vulnerability with support at $US1.0440, a double bottom from earlier in the month. A break would suggest a move under $US1.0400. Resistance was initially seen at $US1.0535, the previous session high.

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Foreign investors have been cooling their interest in bonds sold by Australia’s state governments just as some have been feeling pressure on credit ratings.

However the nation’s big banks have been stepping in to pick up the shortfall, as they prepare for the introduction of new rules forcing them to pump up their holdings of assets.

Overseas ownership of of state government bonds - also known as semi-government bonds - fell by $1.1 billion in the September quarter, according to figures released by the Australian Bureau of Statistics.

This has seen the overseas percentage ownership of semi-government’s fall to 33.8 per cent from 36.2 per cent in the June quarter.State bonds on issue rose by $10.2 billion to $203.8 billion in the September quarter, according to the ABS data.

Among the sectors, financials and consumer staples both pushed up 0.7 per cent, while gold and energy shares lost 0.6 per cent and materials was relatively flat, down 0.1 per cent.

The market has finished stronger, with a fresh 17-month high close. The benchmark S&P/ASX200 added 16.3 points, or 0.4 per cent, to 4634.1, while the broader All Ords rose 13.4 points, or 0.3 per cent, to 4646.6

Hong Kong’s de facto central bank says it will probe Swiss banking giant UBS over claims of possible rigging of Hong Kong’s interbank offered rate (Hibor).

The Hong Kong Monetary Authority (HKMA) today said it had received information from overseas regulators about ‘‘possible misconduct’’ by UBS involving submissions for Hibor and other reference rates in Asia.

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The Bank of Japan eased monetary policy today by expanding its asset-buying and lending programme, a widely expected move in response to intensifying pressure from incoming premier Shinzo Abe to deliver bolder steps to beat deflation.

The central bank topped up its asset-buying and lending programme by 10 trillion yen to 101 trillion yen by a unanimous vote, expanding stimulus for the third time in the past four months.

It also said the board would review at its next policy-setting meeting in January its guidelines for medium- and long-term price stability, which is now set in a range of zero to 2 percent consumer inflation.