MARKET COMMENT: S&P/ASX 200 Likely Flat Before Aussie CPI, China PMI

0001 GMT [Dow Jones] Australia's S&P/ASX 200 is likely to be flat before the 0130 GMT release of domestic CPI data, after which attention will turn to HSBC's flash China PMI data at 0145 GMT. Having digested comments reported Tuesday from China's Premier Li Kequiang that the economy can't be allowed to slip below the 7% growth level, the Australian market has no strong catalyst for further gains. However, commodity prices were slightly positive, with gold, oil, iron ore and copper up 0.1%-0.7%, while BHP (BHP.AU) ADRs rose 1.1% to A$34.88. Domestic CPI data may solidify expectations of a rate cut next month if core CPI is below the consensus 0.4% increase. While a rate cut is largely expected by the market, lower interest rates should tend to support high-yield and consumer-discretionary stocks. Meanwhile, growing expectations that China is prepared to stimulate its economy to prevent a hard landing may be tested if HSBC's flash China CPI falls below the consensus 48.3. Telstra (TLS.AU) shares may rise after BofA ML raised its rating to Buy from Underperform. Index last 5017.1. ([e-mail])

 
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