Outlook: ASX slide south set to continue

Market Reports

Following steep falls on Wall Street and a local benchmark loss of 2 per cent yesterday the Australian share market is set to continue its slide south today. US investors pushed the sell button following dramatic market moves on China’s stock market forcing intervention from regulators. Bearish sentiment was also fuelled by the US Federal Reserve’s cautious June meeting policy statement and a pause of trade on the New York Stock Exchange due to technical issues. 
 
Across commodity markets the price of iron ore has plunged to a 10-year low and the oil price has also declined for a fifth session while the Australian dollar has clawed back over $US0.74. 
 
Global markets
 
Wall Street ended near the session low on Wednesday: The Dow Jones Industrial Average dropped 1.5 per cent to close at 17,515, the S&P 500 retreated 1.7 per cent to close at 2,047 and the Nasdaq sagged 1.8 per cent to close at 4,910.
 
European markets rebounded on Wednesday: London's FTSE 100 rose 0.9 per cent, France's CAC 40 gained 0.8 per cent and Germany's DAX lifted 0.7 per cent.
 
Asian markets sank steeply on Wednesday: Japan’s Nikkei retreated 3.1 per cent, Hong Kong’s Hang Seng plunged 5.8 per cent, and China’s Shanghai Composite tumbled almost 6 per cent.
 
The Australian share market declined 2 per cent by close as concerns about China’s stock market hit home. The S&P/ASX 200 index plunged 112 points to close at 5,470. On the futures market the SPI is 31 points lower. 
 
Currencies 
 
The Australian dollar at 7:30am was buying $US0.7428, 48.36 Pence Sterling, 89.67 Yen and 67.12 Euro cents.
 
Economic news due out today 
 
Australian Bureau of Statistics: Labour force data for June
 
Jobs expectations
 
Commonwealth Bank of Australia’s (ASX:CBA) CommSec expects Australia’s jobless rate held steady at 6 per cent last month. The broking arm has also predicted the economy created 10,000 jobs last month. CommSec says jobs numbers have surprised in recent months with most expecting unemployment would trend higher but instead job growth has been the best in more than four years. Shares in Commonwealth Bank of Australia dipped 2.19 per cent to close at $85.77 on Wednesday. 
 
Company news
 
Infrastructure, engineering and construction company Seymour Whyte Limited (ASX:SWL) has been awarded a $33 million contract. The group will start work immediately on the Pacifc Motorway upgrade for the Queensland  government. Seymour Whyte says it has been road building in the state for almost 30 years. Shares in Seymour Whyte fell 3.64 per cent to close at $1.06 on Wednesday.
 
Commodities 

Gold has risen $10.90 to $US1,164 an ounce for the August contract on Comex. 
Silver has lifted $0.12 to $15.09 for September. 
Copper has added $0.05 to $2.50 a pound. 
Oil has lost $0.68 to $US51.65 a barrel for August light crude in New York.