The Australian share market looks to pull back this morning after global markets ended in negative territory at the end of last week amid Greece’s ongoing debt talks and Standard & Poor’s cutting the credit ratings of 34 Italian banks. At home equities also lost ground over the week after Australia’s central bank kept rates steady on Tuesday and forecast slower growth on Friday.
US economic news
America’s trade deficit widened more than expected at the end of 2011. According to the Commerce Department the US trade deficit expanded to $US48.8 billion in December from $US47.1 billion the month before.
US consumer sentiment snapped five months of gains. The Reuters and University of Michigan consumer sentiment index dropped more than expected to 72.5 in February 2012 from 75 the month before.
Figures
Wall Street fell on Friday, pushing the major indexes down for the week and breaking a five week winning streak: On Friday, the Dow Jones Industrial Average lost 89 points to close at 12,801, the S&P500 lost 9 points to close at 1,343 and the Nasdaq lost 23 points to close at 2,904.
European markets also pulled back on Friday: London’s FTSE lost 43 points, Paris lost 52 points and Frankfurt lost 96 points.
Asian markets closed mixed on Friday: Hong Kong’s Hang Seng lost 226 points, Tokyo Nikkei lost 55 and China’s Shanghai Composite added 2 points.
Over last week the Australian share market lost 6 points, dropping 0.9 per cent on Friday after the Reserve Bank of Australia’s soft economic outlook, China’s weaker than expected trade data and uncertainty over ongoing Greek debt negotiations. On Friday the S&P/ASX 200 Index fell 38 points to finish at 4,245. On the futures market the SPI is 19 points lower.
Currencies
The Australian Dollar at 8:30AM was buying $US1.0699 cents, 67.81 Pence Sterling, 82.99 Yen and 80.99 Euro cents.
Economic news due out today
Australian Bureau of Statistics: Housing finance data for December 2011
Reserve Bank of Australia: Credit and debit card lending figures for December 2011
Company news
Shares in Westpac Banking Corporation (ASX:WBC) closed 1.09 per cent lower on Friday at $20.85. Westpac has joined ANZ Banking Group (ASX:ANZ) and lifted its home loan and small business rates, independent of the Reserve Bank’s decision to keep rates on hold at its February meeting. Both banks blame higher funding costs for the move at the end of last week that will see Westpac increase rates by ten basis points and ANZ by six basis points. Westpac’s rate now sits at 7.46 per cent, ANZ at 7.36 per cent, Commonwealth Bank of Australia (ASX:CBA) at 7.31 per cent and National Australia Bank Limited (ASX:NAB) at 7.22 per cent. Westpac reported a net profit of $7.1 billion in the 2011 financial year.
Shares in Alcoa (ASX:AAI) closed steady on Friday at $10.50. The federal government has refuted reports that Alcoa is vying for more carbon tax compensation. Industry Minister Greg Combet has told the ABC Alcoa has not asked for a better carbon tax deal and the aluminium sector will feel minimum impact from the carbon price that will be effective from mid this year. The comments came just days after Alcoa announced it would review its unprofitable aluminium smelter in Victoria which has come under pressure with metal prices, input costs and exchange rates.
Ex-dividends
Two companies are going ex-dividend today: Bradken Limited (ASX:BKN) and Reckon Limited (ASX:RKN). Among those coming up tomorrow are Argo Investments Limited (ASX:ARG) and Tabcorp Holdings Limited (ASX:TAH).
Commodities
Gold is down $27.70 to $US1,725 an ounce for the April contract on Comex.
Silver is down $0.31 to $33.60 for March.
Copper is down $0.12 at $3.86 a pound.
Oil is down $1.17 at $98.67 a barrel for March light crude in New York.