What you need2know

SPI futures down 30pts at 5161

AUD at 72.61 US cents, 87.10 Japanese yen, 63.85 Euro cents and 47.65 British pence

On Wall St, S&P 500 -0.7%, Dow -0.3%, Nasdaq -0.9%

In Europe, Stoxx 50 -0.8%, FTSE -0.5%, CAC -1%, DAX -0.9%

Spot gold up $US3.96 or 0.3% to $US1167.81/ounce

Brent crude down 96 US cents or 1.9% to $US48.90/barrel

Iron ore falls 2.9% to $US54.97 per tonne

What's on today

Australia consumer confidence, building activity; US retail sales, producer prices, News Corp AGM in New York on Wednesday New York time, Beige Book; China consumer inflation for Sept

Stocks in focus

Hartleys initiates coverage of UIL Energy with a "speculative buy" recommendation.

UBS has a "buy" on Transurban and a price target of $10.60 a share. "Transurban continued its strong growth into the September quarter, delivering like-for-like toll revenue growth of 12.1 per cent off 5 per cent growth in traffic. Reflecting better than expected growth on the Sydney network we have upgraded our FY16 distribution forecast to 45¢ per security, implying 12.5 per cent growth."

Trading ex dividend today: BlackWall Property Funds, BlackWall Property Trust, Nufarm, SMS Management and Technology, United Overseas Australia, Valley Community Financial.

Currencies

The Australian dollar weakened, halting the longest rally in more than six years. New Zealand's dollar dropped for the first time in 11 days. China is the biggest trading partner for both commodity-driven countries.

Sam Choucair at AFEX notes that AUDUSD has accumulated in the month of October for 12 of the past 14 years, and each of the past six.

Fed governor Lael Brainard said on Monday the central bank should wait for clear signs that the US economic recovery could weather global financial turbulence before raising interest rates. Brainard's comments were in contrast to that of other Fed policymakers, including Fed Vice Chair Stanley Fischer, who have said they could support a rate increase in December.

Commodities

Ore with 62 per cent content delivered to Qingdao fell 2.9 per cent to $US54.97 a dry ton on Tuesday, according to Metal Bulletin Ltd.

Benchmark copper on the London Metal Exchange closed 0.8 per cent down at $US5273 a tonne, tumbling from near a three-week high after data showed a sharp drop in Chinese imports for September. This weighed on the market, although monthly copper imports rose by a third to a 20-month high as price differentials and more shipments ahead of last week's holiday in China boosted trade. Overall, yearly copper imports were down 5.3 per cent. "It's financial arbitrage rather than fundamental demand," said Sergey Raevskiy, metals analyst at SP Angel. "But, year to date, are still down. And that goes together with the general turn in Chinese demand."

As for the zinc market's outlook, ANZ is now forecasting a 300kt deficit in 2016 (previously 150kt) after Glencore announced it would shut about 500,000 tonnes of zinc production, or 4 per cent of world production.

United States

US stocks edged lower on Tuesday on renewed fears of slowing growth in China and worries about upcoming earnings reports.

After the market close, Intel reported a 6.3 per cent fall in quarterly profit, weighed down by continued weak demand for chips used in personal computers. The company's net income fell to $US3.11 billion, or 64 US cents per share, for the third quarter ended September 26.  Net revenue fell to $US14.47 billion from $US14.55 billion, the world's largest chipmaker said.

JPMorgan Chase & Co, the biggest US bank by assets, reported a 22.3 per cent rise in quarterly profit as lower costs and a smaller provision for credit losses made up for weaker trading revenue. Net income rose to $US6.80 billion. On a per share basis, the bank earned $US1.68 in the third quarter ended September 30. The prior-period results included legal expenses of $US1 billion, which reduced earnings per share by 26 US cents.

Europe

Banks and commodity producers helped drag European stocks lower as worse-than-expected Chinese import data reignited investor concern about growth prospects in the world's second-biggest economy. The Stoxx 600 retreated 0.9 per cent to 358.47 at the close of trading. The measure on Monday snapped its longest winning streak since July as commodity producers reversed early gains and ended their longest rally since 2000.

"People like to be nervous at the moment because everywhere we look there are risks," said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna. "The China story has an effect on commodities stocks which have moved a lot in the last two weeks. There is a correction on the indexes and short- term oriented people are forced to sell again and this is why we are down. Banks are one of the largest sectors and when the whole market is sold this sector is one of the hardest hit."

Banks posted the biggest decline on the Stoxx Europe 600 Index, with HSBC Holdings contributing the most to the drop. UBS Group lost 1.1 per cent after Switzerland's finance ministry was said to plan requiring the country's biggest banks to have capital equal to about 5 per cent of total assets.

What happened yesterday

The Australian sharemarket retreated further from six-week highs hit last week, as lower commodity prices weighed on mining and energy stocks, while mixed trade data out of China rekindled worries about the health of the world's second-largest economy. The S&P/ASX 200 index fell 30 points, or by 0.7 per cent, to 5202.9, dropping for a second day, while the All Ordinaries was down 32 points, or by 0.8 per cent to 5234.6.