Connection between share price in UK and ASX

[powerkoala]

Hi all,
I just wondering if anyone might know if there is a connection between
share price in UK and ASX.

For example,
BHP share in ASX is 31.01 (closed)
while BHP share in FTSE (UK) is 1,164.50 pence

will the price of BHP on the next day market open (ASX) will follow the price of UK? if so, how the calculation works?
Thanks for your help
Cheers

 

[noirua]

Hi all,
I just wondering if anyone might know if there is a connection between
share price in UK and ASX.

For example,
BHP share in ASX is 31.01 (closed)
while BHP share in FTSE (UK) is 1,164.50 pence

will the price of BHP on the next day market open (ASX) will follow the price of UK? if so, how the calculation works?
Thanks for your help
Cheers

I trade both on the LSE and ASX and 'though there are reasons for differences in prices, there can be differences in some stocks that appear unexplained.

The UK still has the old market maker system of trading which can lead to wide spreads in rarely traded stocks or low priced stocks - 10p sell - 12p buy is often the case on the AIM market, for instance.

BHP is different, as it is a high priced stock and the difference between the buying and selling price is only small and the exchange rate is often the answer here. If you trade bargains of £50,000 ( A$120,000 ) you can take advantage of the spot exchange rates in the market, if not, you may get a rate well below spot.

A lot of wheeler dealing etc., goes on. If there are 5 market makers ( MM's ) dealing the stock, they often sell stock to each other or hold on to stock making a shortage in the market. A large holder may wish to sell and want the stock drip fed into the market or buy over a period. MM's are often accused of manipulating the market price.

If you are close to the market ( buying online ) and are following transactions by the minute, it is possible to see opportunities and put in a buy order below the buying price that could be successful. Unfortunately, MM's are allowed to hold back views of large transactions for several hours.

Sometimes the UK quoted stock is not quite the same as the Aussie one, for instance, RIO Tinto PLC and Rio Tinto Ltd.,

Also there is what is called a market trade i.e. if the general trade is 15,000 shares, then buying or selling smaller or larger amounts could advantage or disadvantage the price you get. There are also some brokers who advertise their abilities to buy and sell at much narrower spreads or those who deal a smaller number of stocks, so as to bring the buyers and sellers together and obtain more advantageous prices. Some transfers of stock may also not go through the market.

The ASX is a far superior market to the LSE when trading low priced stocks. Unfortunately the UK is slow to move and the Market Makers are in a strong position, all very Victorian.

 

[Lucstar]

I think what Powerkoala is trying to ask is that whether or not you can use the London price movements to predict the Australian stock price

 

[powerkoala]

Hi Lucstar,
You right, that what my question is all about.
Sorry for misunderstanding.
I m appreciate all answers though.
Anybody might know about this?
Cheers

 

[noirua]

Investors on the ASX will certainly look forward to the market following the UK today, for once. The FTSE ended up about 2.2% and big miners ended up around 5% to 7%.

Look down and there was just blue sea a reflection of the bright blue sky above. Even the small miners should take heart as the week ends with a sigh of relief and those glasses tinkling as the champagne trickles down.

 

[Atomic5]

I think what Powerkoala is trying to ask is that whether or not you can use the London price movements to predict the Australian stock price

The LSE has the Metals Exchange. Last year I used to notice that a down day with metals on the LSE would generally affect ASX stocks that were metals reliant at opening: eg: if Copper fell during the UK day on the LSE, etc ....

There would however also be ASX reactions to 'overnight' metals trading within the Asian markets, though.