The Australian share market looks to open lower after global markets fell amid increasing concerns about Europe’s debt situation, sparked by uncertainly over political developments in Greece. Investors will also get a chance to respond to the Federal Budget this morning, following its release yesterday evening.
Economic news
Wayne Swan’s fifth Federal Budget has delivered its budget surplus promise. The Gillard government expects a modest surplus of $1.5 billion in the 2013 financial year, representing 0.1 per cent of Gross Domestic Product [GDP]. The surplus is expected to grow to $7.5 billion by 2016. In the current financial year the deficit is expected to reach $44.4 billion, representing 3 per cent of GDP, more than last year’s forecast $37.1 billion.
Figures
Wall Street dropped for a fifth straight day on Tuesday, but closed off session lows: The Dow Jones Industrial Average lost 76 points to close at 12,932, the S&P500 lost 6 points to close at 1,364 and the Nasdaq lost 11 points to close at 2,946.
European markets also finished lower on Tuesday: London’s FTSE lost 101 points, Paris lost 89 points and Frankfurt lost 125 points.
Asian markets closed mixed yesterday: Hong Kong’s Hang Seng lost 52 points, Tokyo’s Nikkei added 63 and China’s Shanghai Composite lost 3 points.
Ahead of the release of the Federal Budget the Australian share closed 0.3 per cent higher on Tuesday. Yesterday the S&P/ASX 200 index added 13 points to finish at 4,314. On the futures market the SPI is currently 20 points lower.
Currencies
The Australian Dollar at 7:20AM was buying $US1.0123 cents, 62.65 Pence Sterling, 80.87 Yen and 77.83 Euro cents.
Stocks to watch
Centro Retail Australia Limited (ASX:CRF) and its former auditor PricewaterhouseCoopers have reportedly agreed to a $200 million settlement in a class action claim. Maurice Blackburn and Slater & Gordon represented two groups of investors who sued Centro for their losses following the shopping centre owner’s downfall in 2007. The settlement is understood to be one of the biggest class action results in Australia’s corporate history. Shares in Centro Retail Australia Limited (ASX:CRF) rose 0.41 per cent to $1.85 in the first hour of trade yesterday before entering into a trading halt.
ANZ Banking Group (ASX:ANZ) chief has lashed out at the Federal Government’s rush to reach a surplus. While chief executive Mike Smith believes Australia’s economy should fundamentally have a surplus he has questioned the speed at which the government has pursued one. Mr Smith also criticised the federal government's new taxes, labelling the mining tax as a "ridiculous" levy that will discourage business and discourage investment. Shares in ANZ firmed 0.04 per cent on Tuesday, closing at $23.11.
Ex-dividends tomorrow
ANZ Banking Group (ASX:ANZ) with a 66 cent fully franked dividend.
Commodities
Gold is down $33.90 to $US1,605 an ounce for the June contract on Comex.
Silver is down $0.66 to $29.46 for May.
Copper is down $0.096 at $3.69 a pound.
Oil is down $0.93 at $97.01 a barrel for June light crude in New York.