Following a negative lead from Wall St overnight the local share market may be in for a weaker start this morning with investors likely to be cautious ahead of earnings results from big companies like BHP, Telstra and the Commonwealth Bank later in the week.
On Monday the local market closed flat. The S&P/ASX 200 Index gained 5 points to 4,304 and on the futures market the SPI200’s down 1 point.
Checking currencies at 8:40AM the Aussie Dollar is buying 83.73 US cents, 81.3 Yen, 59.21 Euro cents and 50.8 British Pence.
In economic news out today: ABS lending finance data for June is to be released, as well as NAB’s monthly business survey for July, Dun and Bradstreet business expectations survey, and the Manpower-Melbourne Institute Employment report for August.
In company earnings results due out today: Cochlear, PMP, Count Financial, Primary Health Care and JB Hi-Fi’s annual results are to be released, as well as Dexion’s first half results.
In company news: Shares in global miner Rio Tinto Ltd (ASX:RIO) lost 3.33 per cent to $58.55 yesterday. According to a report in the Australian a Chinese official who accused Rio of stealing state secrets to gain the upper hand in iron ore price negotiations, says he is not close to the case and his facts came from state media. On the weekend a Chinese government website published a report that claimed Rio Tinto spied on China’s steelmakers for six years, costing them over US$100 billion in excessive charges for iron ore. However an article published in the Australian says that when contacted the Chinese official who made the accusations told media that he had no special knowledge of the case against Australian Stern Hu and other Rio employees who had been detained on stealing state secrets. Saying that the US$100 billion figure he used was taken from state media. Rio Tinto’s 2008 net profit more than halved from its result the year before.
And to more news on the situation of Rio Tinto in China, shares in iron ore miner Fortescue Metals Group Ltd (ASX:FMG) dropped 5.67 per cent to $4.16 yesterday. The company says it is confident of maintaining its relationship with Chinese customers despite the tensions escalating between Rio and China. The Australian Financial Review reports that executive director Graeme Rowley says that although the company is not ignoring what is happening with respect to Rio and China, it is not something that is impacting on the company’s business. The paper reports Mr Rowley saying that all the evidence the company has with respect to its work and operations in China have been positive. Saying that the company has sold every tonne of iron that is has produced at this stage. Fortescue Metals Group posted a US$508 million profit for the year yesterday compared to a loss the year before. Fortescue Metals Group has posted net loses over the last four years.
Checking ex-dividends and going today we have Australian Foundation Company with a 13 cent fully franked dividend, Bradken also with a 13 cent fully franked dividend, Korvest with a 17 cent fully franked dividend, Navitas with an 8.8 cent fully franked dividend, and Tabcorp Holdings with a 30 cent fully franked dividend. And Westfield Group is also going ex dividend today amount to be advised.
To the international scoreboard: US markets closed lower - The Dow Jones industrial average down 32 points. The S&P500 Index fell 3 and the NASDAQ dropped 8 points.
European markets were also weaker: London’s FTSE down 9 points, Paris lost 17 points and Frankfurt fell 41 points.
Asian markets were mixed: Hong Kong’s Hang Seng rose 554 points. Tokyo’s Nikkei added 112 points and China’s SSE Composite lost 11 points.
Looking at Metals: Gold fell US$12.60 to US$946.90 an ounce for the December contract on Comex. For the September contract Silver is down 31 cents to US$14.36 and copper slipped 2 cents at US$2.77.
And finally, the price of oil fell $0.33 to US$70.60 a barrel for September light crude in New York.
