Outlook: Aus shares receive mixed leads February 04, 2011 09:06 AM
The Australian share market looks set to open lower this morning, receiving weak leads from offshore trading overnight. Better than expected US economic growth was not enough to buoy investor confidence, with worries about rising unrest in Egypt and the flow on effects throughout the Middle East taking their toll on the markets.
US economic news: The number of US workers filing new claims for unemployment benefits fell 42,000 to 415,000 for the week ending January 29th. And The Institute for Supply Management’s index of national non-manufacturing activity rose to 59.4 last month, its highest level since August 2005. A reading above 50 indicates expansion in the service sector.
On Thursday, the Dow Jones Industrial Average, closed 20 points higher to 12,062, S&P500 gained 3 points to close 1,307 and the NASDAQ up 4 points to close 2,754.
European stocks were mixed: London’s FTSE down 17 points, Paris also fell 30 and Frankfurt gained 10 points.
To Asian markets, Hong Kong’s Hang Seng and China’s Shanghai Composite were both closed for Chinese New Year. Tokyo was down 26 points.
The Australian share market finished higher on Thursday. The S&P/ASX 200 Index lifted 24 points to close at 4,821 and on the futures market the SPI is up 13 points.
Turning to currencies and the Australian Dollar at 8:25AM was buying $US1.0155, 62.92 Pence Sterling, 82.89 Yen and 74.49 Euro cents.
Company news: On Thursday shares in Equinox Minerals Ltd (ASX:EQN) rose 7.59 per cent to close at $6.66. The copper miner says it has increased the scope of studies for its mine expansion in Zambia. The company said it was looking at expanding the region’s ore throughput rate to 45 million tonnes per annum. The first stage feasibility study is due to be completed in the second quarter of this year. Equinox is also listed on the Toronto stock exchange. Equinox Minerals booked a $124.33 million profit in the 2010 financial year.
Yesterday shares in Alligator Energy Ltd (ASX:AGE) closed up 2.5 cents, or 12.5 per cent higher at $0.225. It was a positive debut on the Australian stock exchange for the uranium explorer. The initial public offer of 75 million shares at a price of 20 cents raised $15 million and was oversubscribed. Its main project is Tin Camp Creek in the Northern Territory. The company expects to spend at least $4 million on exploration there for each of the next two years.
To ex-dividends: The Australian Foundation Investment Company is going ex-dividend today, with an $0.08 cent fully franked dividend.
To commodities: Gold is up $20.90 to $US1,353 an ounce for the April contract on Comex, silver is up $0.44 to $28.73 for March and copper is steady at $4.54 a pound. Oil is down $0.32 at $90.54 a barrel for March light crude in New York.
The Australian share market is 0.4 per cent higher at noon, after Wall St closed marginally stronger following the Federal Reserve’s decision to stimulate the US economy. Locally the miners are leading gains, with BHP up on news the Canadian government has blocked its US$40 billion bid for PotashCorp.
The S&P/ASX200 index is up 21 points at 4,743 and on the futures market, the SPI200 is up 24.
In economic news: The ABS has shown the balance of goods and services in September was a surplus of $1.76 billion, down from $2.446 billion the month before. Retail trade for September increased 0.3 per cent to $20.509 billion, while over the September quarter retail sales increased by 0.7 per cent to $60.156 billion. The Federal Chamber of Automotive Industries (FCAI) has revealed monthly car sales for October didn’t change much in the month, up 0.1 per cent.
To company news: Shares in Austal Ltd (ASX:ASB) soared today, prior to its trading halt, following news the US Navy is in talks with the ship manufacturer. Austal says the trading halt is necessary, pending the release of an announcement regarding the Littoral Combat Ship tender with the US Navy. The US Navy is believed to also be in talks with another party for the tender. Shares in Austal climbed 18.47% to be $2.95 before entering into a trading halt.
Leighton Holdings Ltd (ASX:LEI) says its disappointing first quarter result has been impacted by problems associated with the Brisbane Airport Link project. The confirmation came at the company’s annual general meeting where chairman David Mortimer revealed Leighton’s profit had fallen $85 million in the first three months of the current financial year. Leighton’s unaudited reported profit after tax for the quarter is therefore $48 million compared to $131 million reported last year. Shares in Leighton Holdings have fallen 0.39% to be $32.97 at noon.
Turning now to market indices: The best performing sector is Materials, with the index up 171 points to 13,501. Shares in Atlas Iron are up 5.08% at $2.69. Shares in Alumina and BHP are also higher. The worst performing sector at midday is Financials Excluding Real Estate Investment Trusts, with the index down 22 points to 5,190. Shares in AXA Asia Pacific Holdings are down 1.64% at $5.41. Shares in ASX and Macquarie Group are also lower at midday.
To New Zealand now, the NZSX50 is 4 points lower. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand is at the top of the list with stock up 1.46% at $2.09 followed by; Fisher and Paykel Healthcare, Westpac and Sky City Entertainment Group.
To gold and the dollar: Gold is trading at $1348 US an ounce and the Aussie dollar is trading at just over one US dollar.
Aussie shares are likely to open lower today after US stocks dropped following disappointing data on manufacturing growth, fuelling concerns of an economic slowdown.
In US economic news: The Commerce Department revealed factory orders declined 0.5 per cent in August, more than expected. The National Association of Realtors showed pending home sales increased 4.3 per cent in August.
On Monday, the Dow Jones Industrial Average closed 78 points down at 10,751. The S&P 500 Index is down 9 at 1,137 and the NASDAQ is down 26 at 2,345.
European stocks were down: London’s FTSE down 37 points, Paris is down 42 and Frankfurt down 77.
Asian markets were mixed: Hong Kong Hang Seng up 260, Tokyo’s Nikkei was down 23 and China was closed.
The Australian share market finished higher on Monday. The S&P/ASX 200 Index closed 46 higher to 4,625 and on the futures market the SPI200 is down 24 points.
Turning to currencies and the Aussie Dollar at 8:30AM was buying 96.80 US cents, 61.17 Pence Sterling, 80.71 Yen and 70.76 Euro cents.
In economic news: The Reserve Bank of Australia is tipped to raise interest rates today when it meets for its monthly meeting this afternoon. Also expected out today, The Australian Bureau of Statistics data on international trade in goods and services and retail trade for August. The ANZ Bank job advertisements series for September and The Australian Industry Group/Commonwealth Bank performance of services index for September.
In company news: Shares in BHP Billiton Ltd (ASX:BHP) closed 1.37% up at $40 on Monday. BHP has received a promising sign that its $39 billion hostile takeover bid for Canada’s PotashCorp may go ahead. According to Reuters, an independent report from the Conference Board of Canada has cautioned the Canadian Province where PotashCorp is based not to fight the global miner’s bid. In September BHP received antitrust clearance from regulators in the US to progress with the bid and is still persisting with its takeover of the fertiliser giant. BHP booked a profit of $15.26 billion in the 2010 financial year.
Shares in National Australian Bank (ASX:NAB) closed 1.8% up at $25.45 on Monday. NAB appears to be reaping the rewards of its turnaround strategy, The Australian reporting that data from the Australian Prudential Regulation Authority shows the bank is increasing its mortgage market share through attracting its rival’s customers. According to the report, NAB has the cheapest standard variable rate of 7.24 per cent compared to the country’s other major banks and has lifted its home lending portfolio every month since the last interest rate rise in May. In the six months to 31 March this year, National Australia Bank posted a $2.1 billion profit.
To ex-dividends: Four companies are going ex-dividend today, Australian Masters Corporate Bond Fund No3 with a dividend of $3.26, David Jones with an 18 cent dividend, Greencross with a 2.5 cent dividend and Premier Investments with a 28 cent dividend, all fully franked.
To commodities: and the price of gold is down US$1.00 to US $1316 an ounce for the December contract on Comex, silver is down US$0.02 to $22.04 and copper is down $0.03 at $3.66 a pound. The price of oil is down $0.11 to US$81.47 a barrel for November light crude in New York.
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