Following positive leads from the US where markets are again touching record highs, the Australian stock market could open stronger. News over the weekend that the EU has agreed to a four month extension on Greece’s debt deal may also support investor confidence. Another slew of earnings reports are due today including half year results from Lend Lease and Brambles and full year results from Caltex and Boart Longyear.
US Economic news
Data from the US Labor Department last week showed whole sale prices dropped by 0.8 per cent in January, helped by a 24 per cent plunge in petrol prices. Other reports showed housing starts were down while manufacturing also rose less than expected indicating economic growth could be slowing. Meanwhile multinational companies such as Caterpillar and Microsoft are warning that volatile oil prices and a stronger US dollar will impact on their overseas earnings in the next few months.
Markets
Wall Street closed up yesterday: The Dow Jones Industrial Average gained 0.9 per cent to close at 18,140, the S&P 500 added 0.6 per cent to close at 2,110 and the NASDAQ advanced 0.6 per cent to close at 4,956.
European markets closed mixed: London’s FTSE climbed 0.4 per cent, Paris dipped 0.05 per cent and Frankfurt rose 0.4 per cent.
There was little to report from Asian markets: Tokyo’s Nikkei added 0.4 per cent, Hong Kong’s Hang Seng and China’s Shanghai Composite were closed for the Lunar New Year.
The Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 23 points down to finish at 5,882. The market added just 4 points over the trading week. On the futures market the SPI is 14 points higher.
Currencies
The Australian Dollar at 8:20AM was buying 78.45 US cents, 50.93 Pence Sterling, 93.43 Yen and 68.83 Euro cents.
Company news
Resolute Mining Limited
(ASX:RSG) has produced an improved half year profit on the back of improved profit margins. Gross profit came in at $29 million, up from $21 million in the first half of last year. Operations produced $20 million in cash flow however the deferral of stage 2 of the Syama open pit, a lower US gold price and unrealized treasury losses resulted in a $324 million loss after tax. The gold miner reaffirmed full year production guidance of 315,000 ounces of gold. Shares in Resolute Mining Limited
(ASX:RSG) closed 5.33 per cent lower at $0.35 on Friday.
MacMahon Holdings Limited
(ASX:MAH) announced after market close on Friday that it has lost a contract with Fortescue Metals Group Limited
(ASX:FMG) worth $260 million in annual revenue. FMG decided to consolidate mining services at its Christmas Creek expansion project and awarded the entire works contract to Downer EDI. MacMahon Executive Chairman Jim Walker described the loss as deeply disappointing and said the company would work quickly to accommodate the reduction in revenue. Shares in MacMahon closed 1.75 per cent lower at $0.06 ahead of the weekend with the announcement set to impact the stock price today.
Ex dividends 4 companies are set to trade ex-dividend today: Credit Corp Group Limited
(ASX:CCP) will pay 22 cents fully franked, Clime Investment Management Limited
(ASX:CIW) will pay 3 cents fully franked, FSA Group
(ASX:FSA) will also pay 3 cents fully franked and ITL Limited
(ASX:ITD) will pay a fully franked dividend of 0.5 cents per share.
Commodities
Gold is down $2.70 to $US1,205 an ounce for the April contract on Comex. Silver is down $0.11 to $16.32 for March. Copper is down $0.02 at $2.59 a pound. Oil is down $1.02 at US$50.81 a barrel for March light crude in New York.
