Thursday tumble: Aus shares to open lower

Market Reports

by David Chau

The Australian share market will open lower today, following a weak lead from the US.  On Wall Street, practically every sector finished in the red – with the worst losses sustained by the Healthcare sector.

All eyes are on the Federal Reserve now.  Investors will be listening intently to what Fed chair, Janet Yellen, has to say tomorrow about the state of the US economy and monetary policy.  In particulary, they will be paying attention to whether she says anything different to her two senior Fed colleaagues who expressed hawkish views about the economy last week.

US economic news

Crude oil inventories rose higher than expected last week, with the inventory count at 2.5 million barrels.  Oil prices fell overnight.

Also, existing home sales fell 3.2% in July. Again, this was more than expected, falling to a seasonally adjusted annual rate of 5.39 million.  This is in contrast with yesterday's economic data, where new home sales reached their highest level in 8 years.

Markets

Wall Street closed lower on Wednesday: The Dow Jones Industrial Average lost 0.4 per cent to close at 18,481, the S&P 500 slipped 0.5 per cent to close at 2,175 and the NASDAQ was down 0.8 per cent to close at 5,218.

European markets finished mixed: London’s FTSE was down 0.5 per cent, Paris was up 0.3 per cent and Frankfurt was up 0.3 per cent.

Asian markets closed mixed as well: Nikkei gained 0.6 per cent, the Hang Seng lost 0.8 per cent, and the Shanghai Composite was down 0.1 per cent.

The Australian share market closed higher yesterday: The ASX 200 closed 8 points up to finish at 5,562.  On the futures market, this morning, the SPI is down 6 points.

Currencies

The Australian Dollar at 7:30AM was buying $US76.17 cents, 57.56 Pence, 76.51 Yen and 67.63 Euro cents.

Earnings season

A few companies will be releasing their results today. Some of them include Flight Centre, Nine Entertainment Co Holdings, South32 and Woolworths.

Company news

Wesfarmers Ltd (ASX:WES) has issued a media release in regards to its subsidiary, the home improvement retailer, Bunnings.  Bunnings has entered into an agreement with Home Consortium to acquire some properties in the Masters portfolio. Wesfarmers confirmed that there are 6 fredehold trading locations and 2 freehold development sites under the Bunnings & Home Consortium deal.

Shares in Wesfarmers closed 2.18% lower at $42.63.

On the other hand, Woolworths Ltd (ASX:WOW) has entered three separate contracts to exit the Masters Home Improvement business – for estimated gross proceeds of $1.5 billion. The company says Masters will stop trading at all stores on or before 11 December 2016. The supermarket giant says it will work hard to find Masters employees jobs within the Woolworths Group, otherwise it will pay them full redundancy packages.

Woolworths was in a trading halt and last traded at $24.22.

Ex-dividends



Commodities

Gold has lost nearly $19 to $US1,327 an ounce for the December contract on Comex.
Silver has lost $0.42 to $18.64 for September.
Copper is down 4 cents at $2.09 cents a pound for September.
Oil is down $1.30 to $US46.80 per barrel for October light crude.

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