Thursday outlook: ASX to open flat

Market Reports

by David Chau

The Australian share market looks set for a flat opening this morning.

Overnight, Wall Street finished mixed – with the Dow Jones and S&P 500 reaching new record highs, but the NASDAQ fell slightly.

The Federal Reserve has released the minutes of its November meeting, which occurred a few days before the US Presidential Election. The minutes support the market’s view that a December rate hike is all but certain.

Oil prices are down today, and continues to fluctuate depending on how likely it looks like OPEC will reach a deal to freeze output. Although US crude inventories fell by 1.3 million barrels last week, which is the first time it’s fallen in four weeks.

US economic news

Weekly jobless claims increased by 18,000 to a seasonally adjusted 251,000 for the week ending 19 November.

New orders for durable goods (such as cars, computers, and appliances) rose by 4.8% last month, which was well above market expectations.

The sale of new homes fell by 1.9% in October.

The November figures for the manufacturing purchasing managers index showed slight improvement in market conditions – with a small increase from 53.4 to 53.9.  This is its highest level it has been since October 2015.

Markets

Wall Street finished mixed overnight: The Dow Jones added 0.3% to close at 19,083, the S&P 500 is up 0.1 per cent at 2,205, but the NASDAQ retreated 0.1 per cent to close at 5,381.

European markets finished mostly lower: London’s FTSE was flat, Paris was down 0.4%, and Frankfurt lost 0.5%.

Asian markets were mixed: the Nikkei was closed, the Hang Seng was flat, and the Shanghai Composite lost 0.2%.

The Australian share market performed strongly yesterday: The ASX 200 finished 71 points higher to finish at 5,484. This morning, on the futures market the SPI is up 2 points.

Currencies

The Australian Dollar after 8.00am has weakened against the US Dollar and is buying $US0.7386. 

The Austrlaian Dollar is also buying 59.41 Pence, 83.12 Yen and 70.01 Euro cents.

Company news

Beach Energy (ASX:BPT) has announced a number of changes to its senior executive team. Mike Dodd will become the company’s new Chief Operating Officer, Kevin Hollings will take up the newly-created role of Group Executive Human Resources, and Jeff Schrull will become the Group Executive of Exploration and Development. Shares in Beach Energy closed 3.59% higher at 86 cents.

Rio Tinto (ASX:RIO), the world’s second largest mining company, has agreed to sell its Scottish aluminium smelter, Alcan Aluminium UK, for $410 million. This transaction is expected to close by mid-December, and is an attempt by Rio Tinto’s to reduce its debt levels. Alcan Aluminium was sold to SIMEC, and it will be operated by the Liberty House Group, which is SIMEC’s sister company. Shares in Rio Tinto closed 2.52% higher at $60.15.

Ex-dividends

Four companies are going ex-dividend today:
AusNet Services Ltd (ASX:AST) will pay a dividend of 4.4 cents, 50% franked.
Tilt Renewables (ASX:TRE) will pay 3 cents, unfranked.
Whitefield (ASX:WHF) will pay 8.5 cents, fully franked.
Z Energy (ASX:ZEL) will pay 8.84 cents, unfranked.

Commodities

Gold is down $23 to $US1,192 an ounce.
Silver has lost $0.27 to $16.46.
Copper has risen by $0.06 to $2.63 a pound.
Oil is down $0.03 to US$48 per barrel.

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