The Australian share market is likely to open relatively flat following small falls and mixed results on global share markets and largely unchanged commodities prices.
On Friday the local share market closed stronger driven by gains in the materials sector on the back of stronger commodity prices. The S&P/ASX 200 Index added 31 points to 3,794 and on the futures market the SPI200’s is up 3 points.
Checking currencies at 8:35 am the Aussie dollar is buying 77.98 US cents. On the cross rates the dollar is trading at 72.12 Yen, 55.9 Euro cents and 48.18 British pence.
In economic news out today, the Australian Bureau of Statistics releases its lending finance data for May.
In company news:Rio Tinto Ltd (ASX:RIO) shares closed stronger on Friday, adding 1.6% to $48.36. Australia will today lobby China to provide more details on four Rio Tinto employees including Executive Stern Hu, who have been detained for allegedly stealing state secrets. China has accused Hu of bribing steel mill officials in the country during negotiations over the price to be paid for Rio’s iron ore. The ABC reported last night that the facility where Mr Hu is being detained is a detention centre on the outskirts of Shanghai. It’s feared Mr Hu will have to wait at least another month before another visit from consular officials. Australian officials in Canberra and Beijing are expected to press Chinese authorities today for the case to be dealt with expeditiously. Rio Tinto’s best profit result over the last five years was in 2006 with over US$7.4 billion.
Virgin Blue Holdings Ltd (ASX:VBA) shares closed flat on Friday at 30 cents. The Age newspaper is reporting that the airline might be about to sell $400 million worth of shares to strengthen its balance sheet. Without citing any sources the Age reports that Virgin may have to sell shares to a cornerstone investor, while it raised doubts that Virgin Group, the owner of 22.5% of Virgin Blue, may not buy stock in a sale. The newspaper also said that the share sale might be announced on Wednesday. Virgin Blue’s best profit result over the past five years was in 2007 with $215 million.
To international markets:Wall Street finished mixed on Friday. The Dow Jones industrial average lost 37 points. The S&P500 Index fell 4 points and the NASDAQ added 3 points.
European markets were lower: London’s FTSE fell 31 points. Paris lost 43 points and Frankfurt down 54 points.
Asian markets were also weaker: Hong Kong’s Hang Seng lost 82 points. Tokyo’s Nikkei shed 4 points and China’s SSE Composite down 9 points.
Looking at Metals: Gold slipped US$3.70 to US$912.50 an ounce, for the August contract on Comex. For the September contract Silver is down 29 cents to US$12.65 and copper is down 3 cents to US$2.21.
And finally as the market focused on weak demand and risks of deflation the price of oil fell 52 cents to US$59.89 a barrel for August light crude in New York.
