International tensions rising: ASX to open flat

Market Reports

by David Chau

According to ASX futures, the Australian share market will open flat this morning as investors monitor rising geopolitical tensions.

This follows China’s recent seizure of an American underwater drone in international waters, which promoted some fiery tweets from US President-elect, Donald Trump, and news that the Russian ambassador to Turkey has been killed after being shot by a gunman at an art gallery in Ankara.

US equities finished higher this morning, led by advances in telcos, technology and real estate shares. On the other hand, Financials shares (which have been the strongest performer since the US election) have retreated and were one of the weakest performers during the Monday session on Wall Street.

Australia managed to hold on to its AAA credit rating yesterday. However, it’s expected that the federal government won’t be able to prevent the ratings agencies downgrading Australia’s credit rating over the next year.

Markets

Wall Street finished higher this morning: The Dow Jones gained almost 0.2% to close at 19,883, the S&P 500 added 0.2% to finish at 2,263, while the NASDAQ rose 0.4% to close at 5,457.

European markets were mostly higher: London’s FTSE was up almost 0.1%, Paris slipped 0.2%, and Frankfurt added 0.2%.

Asian markets finished lower: the Nikkei was down almost 0.1%, the Hang Seng fell almost 0.9%, while the Shanghai Composite was down almost 0.2%.

The Australian share market finished stronger yesterday, with the ASX 200 closing 29 points higher at 5,562. This morning, on the futures market the SPI is down 12 points.

Currencies

The Australian Dollar at 8.30am is buying $US0.7253, 58.51 Pence, 85.04 Yen and 69.74 Euro cents.

Company news

Decmil Australia, a subsidiary of Decmil Group (ASX:DCG), has secured a $40 million contract with Hamersley Iron Pty Ltd. This contract is for the design, construction and commissioning of new facilities at the existing Nammuldi central mine services, and at the Silvergrass iron ore mine services area in Western Australia. The company says this project will commence immediately and should be completed in late 2017. Shares in Decmil Group closed 0.49% lower at $1.02.

Northern Minerals (ASX:NTU) has signed an Engineering, Procurement and Construction contract with China’s Sinosteel Equipment & Engineering Co Ltd. This contract is for the delivery of the Browns Range Heavy Rare Earth Pilot Plant in Western Australia. As part of the agreement, Sinosteel agreed to defer 20% of the contract value for a period of 24 months. Shares in Northern Minerals closed 4.55% higher at 12 cents.

Ex-dividends

One company is going ex-dividend today: James Hardie Industries (ASX:JHX) will pay an unfranked dividend of 10.59 cents per share.

Commodities

Gold is down $1.70 to $US1,141 an ounce.
Silver has lost $0.04 to $16.04.
Copper was flat at $2.50.
Oil is down $0.34 to US$51.78 per barrel.

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