New Zealand/Australia Morning Call-Global markets

-----------------------(07:18 / 1818
GMT)-----------------------
Stock Markets
S&P/ASX 200 6,216.40 -20.50 NZSX 50 3,939.7
+13.60
DJIA 13,182.48 -49.99 Nikkei 15,030.51
-177.35
NASDAQ 2,592.07 -3.96 FTSE 6,284.50
+5.20
S&P 500 1,450.12 -4.86 Hang Seng 26,732.87
+296.39
SPI 200 Fut 6,179.00 -34.00 CRB Index 349.61
+2.56
Bonds
AU 10 YR Bond #N/A DRP+#N/A DR US 10 YR Bond 4.083
-0.038
NZ 10 YR Bond 6.985 +0.000 US 30 YR Bond 4.492
-0.046
Currencies (Prev at 7pm NZST)
AUD US$ 0.8579 0.8610 NZD US$ 0.7557
0.7563
EUR US$ 1.4354 1.4398 Yen US$ 113.38
113.25
Commodities
Gold (Lon) 799.75 Silver (Lon) 13.980

Gold (NY) 790.10 Light Crude 91.18
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Overnight market action. An updated report will be sent after
the close of New York markets.

EQUITIES

NEW YORK - U.S. stocks fell on Wednesday after Standard &
Poor's downgraded its rating outlook on several bond insurers,
suggesting further potential turmoil in the financial sector.
The stock market erased its morning gains after S&P cut its
outlook for both AMBAC Financial Group Inc (ABK.N: Quote, Profile, Research) and MBIA Inc
(MBI.N: Quote, Profile, Research), suggesting their "triple-A" credit ratings are at
risk. S&P also cut its rating on ACA Financial Gauranty Corp
ACAH.PK to junk and said it may cut the triple-A rating of
Financial Guaranty Insurance Co.

The Dow Jones industrial average .DJI was down 37.56
points, or 0.28 percent, at 13,194.91. The Standard & Poor's
500 Index .SPX was down 3.78 points, or 0.26 percent, at
1,451.20. The Nasdaq Composite Index .IXIC was down just 0.23
of a point or 0.01 at 2,595.80.

MBIA's shares slid 10.5 percent to $24.78 and AMBAC
Financial's stock lost 6.6 percent to $25.20.

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LONDON - Britain's top share index ended flat on Wednesday
as a persisting credit seizure offset news of solid demand for
a $20 billion Federal Reserve auction aimed at easing the
liquidity strain.

Credit fears were exacerbated in late trade by credit
rating agency Standard & Poor's action on six U.S. bond
insurers, with one insurer's rating being cut by 12 notches to
"junk" territory from investment grade.

UK banks staged a mixed performance, with Alliance &
Leicester ALLL.L adding 2.2 percent and HSBC (HSBA.L: Quote, Profile, Research) up 0.6
percent, while Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Standard
Chartered (STAN.L: Quote, Profile, Research) also rose.

Britain's FTSE 100 index .FTSE ended up 0.08 percent, or
5.2 points, at 6,284.5 in choppy, thin trade in the run-up to
the Christmas break.

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TOKYO - Japanese stocks extended losses into a sixth day
after banks including Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research)
failed to sustain earlier gains as investors were quick to book
profits amid thin trade.

Chip-related firms such as Advantest Corp (6857.T: Quote, Profile, Research) and
Tokyo Electron Ltd (8035.T: Quote, Profile, Research) were among stocks dragging down the
market after they fell on weak order data.

But Mitsubishi UFJ ended down 1.1 percent at 1,031 yen
after rising as much as 2.6 percent. Mizuho Financial fell 1.3
percent to 529,000 yen.

Steelmakers also met the same fate. They jumped after the
Nikkei business daily said Nippon Steel Corp (5401.T: Quote, Profile, Research) and two
other domestic partners would bolster capital ties to counter
the rapid growth of ArcelorMittal (ISPA.AS: Quote, Profile, Research).

The benchmark Nikkei .N225 ended the session down 1.2
percent at 15,030.51. The index has lost 6.3 percent in its
six-day losing streak.

The broader TOPIX .TOPX fell 0.9 percent to 1,456.79.

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FOREIGN EXCHANGE

NEW YORK - The dollar rose against the euro on Wednesday as
index of German business sentiment fell to near a one-year low,
which encouraged some large investors to increase their
year-end buying.

The dollar trimmed some losses against the yen following
strong demand for the Federal Reserve's $20 billion auction,
which was part of a coordinated move by major central banks to
ease a credit crunch in the money markets.

The euro last traded 0.4 percent down at $1.4345 EUR=.
It slipped to a session low of $1.4327 in overnight trade after
an index of German business confidence declined in December to
its lowest since January.

Sterling fell to a three-month trough below the key $2.00
level. Traders were pricing in another interest rate cut by the
Bank of England after minutes from central bank's December
meeting showed that all nine members voted for a cut to 5.5
percent. Sterling was last trading down 0.9 percent at
$1.9950 GBP=.

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TREASURIES

NEW YORK - U.S. Treasuries rose on Wednesday after Standard
& Poor's offered a grim assessment of bond insurers, reviving
the credit concerns that have kept government bonds well bid
for several months.

S&P cut ACA Financial Guaranty Corp. to junk status, and
warned that the AAA rating of larger bond insurers that
underpins so many fixed-income investments could come under
pressure.

The news sent stocks lower and pushed benchmark 10-year
notes 5/32 higher for a yield of 4.10 percent, down two basis
points from Tuesday.

Investors had a mixed reaction to the Federal Reserve's
inaugural offering of emergency loans for ailing money markets.

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COMMODITIES

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GOLD

NEW YORK - U.S. platinum futures inched up early on
Wednesday, after hitting a record high in the previous session,
helped by robust investment demand and supply tightness amid
uncertainty about when Russia will issue export licenses.

At 10:23 a.m. EST (1523 GMT), NYMEX January platinum PLF8
was up $2.70 at $1,518.00. It hit a bottom of $1,508.90 in the
early sessions and a high of $1,523. Spot platinum XPT= was
quoted at $1,512/1,516.

February gold GCG8 on the COMEX division of the NYMEX was
down 10 cents at $807.30 an ounce. It traded in a narrow range
between $802.20 and $808.40.

Spot gold XAU= was quoted at $800.10/800.80 an ounce,
compared with $802.90/803.60 in New York on Tuesday afternoon.
London bullion dealers fixed the afternoon spot reference price
at $799.75.

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BASE METALS

LONDON - Copper was capped in ranges on Wednesday as
liquidity dried up ahead of the end-year holidays and as
worries about future demand dampened sentiment.

Copper for delivery in three months MCU3 on the London
Metal Exchange ended the day at $6,515 per tonne, from $6,380
at the close on Thursday.

LME aluminium MAL3 ticked up $17 to $2,428. The light
metal, used in the automotive and packaging industries, has
been seen as the laggard of the complex with upward potential
as prices are trading just above the cost of production.

Zinc MZN3 fell $7 to $2,308 after shedding 46 percent
this year.

Lead MPB3 gained $71 to $2,526 and tin MSN3 was
untraded but quoted at $16,150/16,160 from $16,000/16,025.
Nickel MNI3, the key ingredient in stainless steel, was up
$750 at $26,650.

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OIL

NEW YORK - U.S. crude oil futures firmed at midday
Wednesday after government inventory data showed a huge
drawdown in U.S. crude stocks last week, tightening supplies
for the fifth week in a row.

At 12:35 p.m. EST (1735 GMT), new front-month February
crude CLG8 traded up 93 cents, or 1.03 percent, at $91.01 a
barrel on the New York Mercantile Exchange. It traded from
$89.70 to $91.48.

In London, February Brent LCOG8 rose $1.15, or 1.28
percent, to $91.27 a barrel, trading from $89.75 to $91.74.

The U.S. Energy Information Administration said that for
the week to Dec. 14, domestic crude stocks fell much more than
expected, by 7.6 million barrels, to 296.6 million barrels, the
lowest level since the week to Feb. 11, 2005. (EIA/S)

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