The local share market looks like it may open lower today following losses on Wall St overnight. The U.S. Federal Reserve kept interest rates unchanged near zero but also said it will slow purchases of mortgage debt. Falls in oil and metal prices may also weigh heavily on resource stocks today.
Yesterday, the local share market closed higher. The S&P/ASX 200 Index finished 70 points higher at 4,734 and on the futures market the SPI200’s down 28 points.
Checking currencies at 8:45 AM the Aussie Dollar is buying 86.82 US cents, 79.41 Yen, 58.99 Euro cents and 53.14 Pence Sterling. In economic news: The RBA releases its half yearly Financial Stability Review today, and the Housing Industry Association new homes sales report for August is also out today.
In company news this morning, shares in industrial brands business Alesco Corporation Ltd (ASX:ALS) gained 0.2 per cent to $5.11 yesterday. The company says its level of profitability for the first quarter of fiscal 2010 is below last year but says it expects to see improvement in some of its divisions. In July Alesco posted a net loss of $12.8 million for the year to May 31 compared to a profit of $58 million in 2008. At the company’s annual general meeting chairman Sean Wareing told shareholders that the company believes that the worst is behind it in terms of the external market place, and the company’s trading remains subdued. Mr Wareing says Alesco’s performance this financial year will be driven by the timing of the recovery in the new housing and renovation markets. Alesco Corporation fell into the red in 2009 after posting profits the four years previous.
Shares in Insurance Australia Group (ASX:IAG) rose 1.34 per cent to $3.78 yesterday. Australia’s second largest insurer says it expects to see a stronger performance this financial year after rebuilding the foundations to strengthen the business. CEO Michael Wilkins says the company expects gross written premium to grow in the range of one to three per cent and for IAG’s insurance margin to improve to within a range of nine to 11 per cent. IAG says it will focus on improving its Australian direct insurance business through more effective marketing and improved efficiency. And says it will rebuild the fundamentals in its Australian intermediated business, CGU, through better pricing and improved underwriting, and improve the performance of its New Zealand business. IAG posted a profit in 2009 after a loss the year before.
Checking ex-dividends, and among those companies going ex-dividend today we have Cabcharge Australia with a 17 cent fully franked dividend, Hastings Diversified Utilities Fund with a three cent unfranked dividend, ING Office Fund with a 0.98 cent unfranked dividend and Mirvac Group with a 2 cent unfranked dividend.
To the international scoreboard: US markets finished lower overnight. The Dow Jones industrial average lost 81 points. The S&P500 Index dropped 11 points and the NASDAQ fell 15 points.
European markets were slightly lower: London’s FTSE fell 3 points, Paris lost 2 points and Frankfurt dropped 7 points.
Asian markets were weaker: Hong Kong’s Hang Seng fell 106 points. Tokyo’s Nikkei was closed and China’s SSE Composite dropped 55 points.
Looking at Metals: Gold slipped $1.10 to US$1014.40 an ounce for the December contract on Comex. Silver declined 21 cents to US$16.91 and copper fell 6 cents to US$2.81.
And finally, oil lost $2.79 to US$68.97 a barrel for November light crude in New York.
