Outlook: Aus shares receive strong offshore leads January 13, 2011 09:20 AM
The futures are suggesting a positive start for Aussie shares, having received strong offshore leads. Wall St closed Wednesday’s session with all three major indexes at multi-year highs, with concerns over Europe’s sovereign debt easing following a healthy bond auction in Portugal. At home corporate Australia is starting to tally the cost of damage from Queensland’s flooding crisis, construction and retail companies adding their operations to the list impacted by devastating weather conditions.
In US economic news: The Federal Reserve released its latest Beige Book, which is out eight times a year and provides an indication of economic conditions. The Fed reported moderate growth for the economy, lifted by the manufacturing, retail, and non financial services sectors but pulled down by the country’s real estate market. While employment conditions delivered some optimism the Fed declaring the labor market appears to be firming somewhat. The Department of Treasury showed the US government ran a deficit of $80 billion in December, down from $91.4 billion the month before.
On Wednesday, the Dow Jones Industrial Average, closed 84 points stronger to 11,755. S&P500 grew 11 points to close 1,286 and the NASDAQ added 21 points to close 2,737.
European stocks were higher: London’s FTSE up 37 points, Paris up 83 and Frankfurt up 127.
To Asian markets, stocks were higher: Hong Kong’s Hang Seng up 365 points, Tokyo up 2 points and China’s Shanghai Composite up 17 points.
The Australian share market finished stronger on Wednesday. The S&P/ASX 200 Index lifted 14 points to close at 4,724 and on the futures market the SPI is up 26 points.
Turning to currencies and the Aussie Dollar at 8:45AM was buying 99.64 US cents, 63.23 Pence Sterling, 82.7 Yen and 75.91 Euro cents.
Local economic news: Expected out today, the Australian Bureau of Statistics labour force data for December 2010.
Company news: On Wednesday shares in Woolworths Ltd (ASX:WOW) slipped 0.26 per cent to close at $26.72. Woolworths has warned that the flooding crisis in Queensland will present supply challenges in the next months, some analysts predicting the country’s fruit and vegetable prices could jump by as much as 20 to 30 per cent. In Queensland the supermarket retailer says fresh food shortages are now likely, having closed nine supermarkets, as well as a number of petrol stations and bottle shops in the state. Despite many regional stores receiving sporadic deliveries, Woolworths says daily deliveries are still being made to Brisbane metropolitan stores. Woolworths booked a net profit of $2.03 billion in the year to 27 June 2010.
Yesterday shares in JB Hi-Fi Ltd (ASX:JBH) lost 0.33 per cent to close at $18.25. JB Hi-Fi looks to have sidestepped the flooding crisis, advising the market that it has not been materially affected. The electronics retailer has however closed 12 of its 32 stores in Queensland, it says not due to flooding but rather electricity supply being halted and employees unable to access work safely. JB HiFi says its Ipswich store is still at risk of damage, but the financial impact from damage to the store is likely to be minimal. JB Hi-Fi boosted its fiscal 2010 result by 27 per cent, reporting a net profit of $118.7 million.
To ex-dividends: No companies are going ex-dividend today but coming up tomorrow are Abacus Property Group and Viterra.
To commodities: Gold is up $1.50 to $US1,385 an ounce for the February contract on Comex, silver is up $0.05 to $29.54 for March and copper is up $0.06 to $4.41 a pound. Oil is up $0.75 at $91.86 a barrel for February light crude in New York.
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