Volatile times ahead: ASX set for weaker open

Market Reports

by David Chau

The Australian share market is excepted to open lower today, due to weak leads from the US.

Wall Street finished mostly lower overnight, with the Nasdaq being the only index which posted a gain.  The Nasdaq’s performance was boosted by Apple shares, which surged 3.6%, marking the tech company’s best trading day since late-July.

This past trading week has been quite volatile, ahead of next week’s Fed decision on interest rates. On Tuesday, the CBOE Volatility Index, which measures fear in the US market, shot up by over 20%.  Overnight, it rose by 1.62% and the current reading is 18.14.

US stocks were heavily weighed down by the Energy sector, due to oil prices falling again.

Economic news

Data released overnight by the US Energy Information Administration showed that crude inventories fell by 559,000 barrels last week. This was a better than expected result, as analysts were expecting a buildup of 3.8 million barrels.

However, inventories of distillates (such as diesel and heating oil) increased by 4.6 million barrels, and gasoline stocks rose by 567,000 barrels.  These increase in stockpiles offset the fall in crude inventories.

Markets

Wall Street closed mostly lower overnight: The Dow Jones lost 0.2 per cent to close at 18,035, the S&P 500 was down 0.1 per cent to close at 2,126 and the NASDAQ gained 0.4 per cent to close at 5,174.

European markets finished mixed: London’s FTSE gained 0.1 per cent, Paris fell 0.4 per cent and Frankfurt was down 0.1 per cent.

Asian markets were lower: the Nikkei was down 0.7 per cent, the Hang Seng dropped 0.1 per cent, and the Shanghai Composite slipped by 0.6 per cent.

The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 20 points up to finish at 5228. And on the futures market, this morning the SPI is down 19 points.

Currencies

The Australian Dollar at 7:20AM was buying $US74.70 cents, 56.45 Pence, 76.51 Yen and 66.43 Euro cents.

Local economic news

Later today, the Australian Bureau of Statistics will release unemployment figures for August.

Company news

Flight Centre (ASX:FLT) has acquired a 49% minority stake in the Gold Coast-based Ignite Travel Group. Ignite is a travel retailer established in 2005 which offers curated holiday packages, travel vouchers and rewards programs. Flight Centre excepts Ignite’s total transaction value, this financial year, to exceed $100 million, and sees this acquisition as a way to diversify its sales network. Shares in Flight Centre closed 2.7% lower at $36.37.

Australian based travel company, Helloworld (ASX:HLO) has signed a deal with New Zealand-based World Travellers. As part of this deal, World Travellers will join Helloworld’s retail network in New Zealand from October 2016. Helloworld expects this deal to add over $90 million to its top line total transaction value each year. Shares in Helloworld closed 0.45 per cent lower at $4.43.

Commoditiy prices

Gold has gained $2.40 to $US1,326 an ounce.
Silver has gained $0.09 to $19.07.
Copper has gained at 5 cents to $2.16 a pound.
Oil is down $1.33 to $US44.15 a barrel.

Ex-dividends:


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