The Australian share market looks to open higher ahead of the Reserve Bank of Australia’s monthly interest rate decision this afternoon. Despite negative leads the SPI is pointing to a positive start after Wall Street ended off the session’s low as traders considered the impact of Greece’s referendum. Closer to home the Australian dollar has lifted off a six-year low against the US dollar but the iron ore price has continued to fall closer to $US50 per tonne.
Global markets
Wall Street slipped into the new week after returning from a long weekend: The Dow Jones Industrial Average eased 0.3 per cent to close at 17,684, the S&P 500 lost 0.4 per cent to close at 2,069 and the Nasdaq dipped 0.3 per cent to close at 4,992.
European markets moved lower on Monday: London's FTSE 100 fell 0.8 per cent, France's CAC 40 shed 2 per cent and Germany's DAX declined 1.5 per cent.
Asian markets finished mixed on Monday: Japan’s Nikkei dropped 2.1 per cent, Hong Kong’s Hang Seng sank 3.2 per cent, and China’s Shanghai Composite jumped 2.4 per cent.
The Australian share market nosedived more than 1 per cent on Monday as investors responded to the results of a Greek referendum rejecting bailout terms: The S&P/ASX 200 Index plunged 63 points to close at 5,475. On the futures market the SPI is 19 points higher.
Currencies
The Australian dollar fell to a six-year low against the greenback yesterday and at 7:30am this morning was buying $US0.7501, 48.09 Pence Sterling, 91.93 Yen and 67.85 Euro cents.
Economic news due out today
Reserve Bank of Australia: July interest rate decision
Australian Bureau of Statistics: Tourist arrivals and departures data for May
RBA expectations
Commonwealth Bank of Australia’s
(ASX:CBA) broking arm does not expect the RBA will make any change to interest rate settings today. Commsec says inflation is contained, home building is soaring, consumers are spending freely and businesses appear to be embracing the federal budget stimulus. Commsec also notes economists appear divided as to when the next move will be but a growing number believe the Reserve Bank is now on the sidelines perhaps to next year. Shares in Commonwealth Bank of Australia fell 0.42 per cent to close at $86.30 on Monday.
Company news
Automotive Group Holdings Limited
(ASX:AHG) has inked a deal to buy three Mercedes-Benz passenger and van dealerships in Perth. The automotive retailing and logistics group says the deal is valued at about $58 million and is expected to be immediately earnings accretive. Managing Director Bronte Howson believes the acquisition is an exciting opportunity in the prestige automotive sector and the dealerships have a level of exclusivity in the Western Australian market. Shares in Automotive Group Holdings slipped 2.24 per cent to close at $3.93 on Monday.
Ex-dividends
Collins Foods Limited
(ASX:CKF) paying a 6.5 cent fully franked dividend
Commodities
Gold has risen $5.80 to $US1,169 an ounce for the August contract on Comex.
Silver has gained $0.15 to $15.71 for September.
Copper has lost $0.10 to $2.54 a pound.
Oil has retreated $4.25 to $US52.68 a barrel for August light crude in New York.
Thank you for watching the Australian Share Market Outlook on Tuesday 7 July. I’m Lelde Smits for the Finance News Network
