ASX to fall on open: US election anxiety ongoing

Market Reports

by David Chau

The Australian share market will open lower this morning, extending its losses from yesterday.

Global investors have been on the defensive after the FBI announced last week it was reviewing new emails related to Hillary Clinton’s use of a private email server while she was Secretary of State. This resulted in Clinton’s once-comfortable lead over Donald Trump tightening, according to some polls.

The CBOE Volatility Index has surged more than 10% to a level of 19.8, which is a two-month high.

Also, the Federal Reserve has started its two-day meeting on Tuesday. While the Fed isn’t expected to raise interest rates this week, many economists are predicting that a December rate hike is very likely.

US economic news

American manufacturing has expanded at a modest pace, cushioning a slowdown in the number of orders made. The Markit manufacturing purchasing managers index came in at 53.4 last month – beating the September result of 51.5.

However, construction spending fell unexpectedly in September (according to the Commerce Department), slipping 0.4% percent.

Markets

Wall Street closed lower yesterday: The Dow Jones lost 0.6 per cent to close at 18,037, the S&P 500 closed 0.7% lower 2,112 and the NASDAQ closed 0.7% lower at 5,154.

European markets closed lower: London’s FTSE fell 0.5 per cent, Paris lost 0.9 per cent and Frankfurt dropped 1.3 per cent.

Asian markets closed higher: Nikkei rose 0.1 per cent, Hang Seng gained 0.9 per cent, and Shanghai Composite added 0.7 per cent.

The Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 27 points down to finish at 5,291. On the futures market the SPI is down 36 points.

Currencies

The Australian Dollar at 7:50AM was buying $US76.54 cents, 62.54 Pence Sterling, 79.65 Yen and 69.24 Euro cents.

Local economic news

The Australian Bureau of Statistics will release its September building approvals data later today.

In August, the seasonally adjusted estimate for total dwellings approved fell by 1.8%.

Company news

SpeedCast International Ltd (ASX:SDA), a global satellite communications provider, will acquire Harris CapRock for $560 million. Harris CapRock is an American company which provides communications networks for remote and harsh environments – primarily for the energy and maritime markets. This transaction will be funded by a $295 million equity raising, with the rest to be funded by debt. Shares in SpeedCast closed 1.5 per cent down yesterday at $3.93.

Hansen Technologies Ltd (ASX:HSN) has (through its subsidiary) entered a deal to acquire DST Billing Solutions Ltd. DST owns HiAffinity, a customer care and billing system, which is focused on the water billing industry in Australia, Africa and the Americas. This new acquisition is expected to represent less than 5% of Hansen’s combined worldwide revenue and EBITDA on a full year basis. Shares in Hansen closed 2.4 per cent down yesterday at $4.10.

Commodities

Gold has risen $16.50 to $US1,290 an ounce for the December contract on Comex.
Silver has gained $0.58 to $18.38 for March.
Copper has added $0.03 to $2.23 a pound for December.
Oil has dropped $0.39 to $US46.47 a barrel for December light crude in New York.