The local share market may be in for a weaker start this morning following big falls on Wall St overnight as talk of a second stimulus package fuelled concern that the economy may not yet be on the road to recovery. Weaker oil and metal prices are likely to pressure energy and resource stocks today.
On Tuesday the local share market closed lower with the S&P/ASX 200 Index losing 17 points to 3,767 and on the futures market the SPI200’s down 62 points.
Checking currencies at 8:40am the Aussie dollar is buying 78.88 US cents. On the cross rates the dollar is trading at 74.82 Yen, 56.67 Euro cents and 48.92 British pence.
Among the economic news due out today: The Australian Chamber of Commerce and Industry survey of investor confidence is to be released, as well as the ABS housing finance data for May and the Westpac/Melbourne Institute Survey of Consumer Sentiment for July.
In company news: Shares in gas explorer and producer Arrow Energy Ltd (ASX:AOE) fell 3.88 per cent to $3.22 yesterday. The company says its 450 mega watt Braemar 2 Power Station is now fully operational with all three 150 mega watt gas fired generation units now fully commissioned and in commercial operation. The Braemar 2 Power Station is owned by the NewGen Braemar 2 Partnership, a 50/50 partnership between subsidiaries of Arrow and ERM Power. Arrow says construction of the power station and associated high pressure gas pipeline has been completed at a cost of $530 million, a saving of around $15 million from original budget estimates. Arrow Energy has posted net profits in the last two years after losses the three years previous.
Shares in crane hire and lifting services group Boom Logistics Ltd (ASX:BOL) plunged 14.71 per cent to 29 cents yesterday. The company has put on hold a proposed capital raising while it considers a merger proposal from its largest shareholder Harbrew Group. Boom who came out of a trading halt yesterday says the merger proposal is preliminary in nature, however it does offer the prospect of an alternative approach to strengthen the company’s balance sheet.Harbrew, through McAleese Investments holds a 12.2 per cent stake in Boom. Boom also reconfirmed its earnings forecast for net profit after tax of $12 million for fiscal 2009, and earnings before interest, tax, depreciation and amortisation of $70 million. Boom Logistics 2008 net profit fell from its high in 2007 of $34.44 million.
To international markets and Wall Street closed lower on Tuesday - the Dow Jones industrial average fell 161 points. The S&P500 Index lost 18 points and the NASDAQ closed 41 points weaker.
European markets also closed weaker: London’s FTSE down 8 points, Paris lost 34 points and Frankfurt fell 54 points.
Asian markets were lower: Hong Kong’s Hang Seng declined 117 points. Tokyo’s Nikkei shed 33 and China’s SSE Composite lost 35 points.
Looking at Metals: Gold is up US$4.80 to US$929.10 an ounce for the August contract on Comex. For the September contract Silver is down 2 cents to US$13.22 and copper lost 4 cents to US$2.23.
And finally oil fell US$1.12 to US$62.93 a barrel for August light crude in New York.
