Australian shares are set to lose further ground when the market opens today, after Wall Street suffered its worst one day fall in three months overnight as poor economic data raised concerns over the strength of an economic recovery.
The Australian share market closed lower yesterday. The S&P/ASX 200 Index dropped 43 points at 4,701 and on the futures market the SPI200’s down 75 points.
Checking currencies at 8:35 AM the Aussie Dollar is buying 87.04 US cents, 78.01 Yen, 59.9 Euro cents and 54.65 Pence Sterling.
In economic news out today: TD Securities-Melbourne Institute inflation gauge for September is released.
In company news about this morning: Commonwealth Bank (ASX:CBA) shares closed lower yesterday, down 1.64% to $50.90. CBA’s chief executive Ralph Norris could get as much as $7.86 million of shares in the group as part of a revised long-term incentive scheme. But to achieve this CBA's board says Mr Norris would have to turn in an extraordinary achievement between now and 2014 under the revised rewards plan. The bank's shareholders will get to vote on his new shares plan at the annual meeting next month. CBA’s net profits have been consistently strong over the past five years.
Babcock and Brown Infrastructure (ASX:BBI) shares are in a trading halt and last traded at 5.3 cents. The Australian Financial Review reports that BBI is planning to raise as much as $650 million of new capital and rename itself Prime Infrastructure. The development is reportedly part of a transaction with Brookfield Asset Management that’s aimed at reducing Babcock’s debt. The Review says the infrastructure group plans to raise the equity at close to 8.7 times projected 2010 earnings before interest, tax, depreciation and amortization. Babcock and Brown Infrastructure’s net profit fell into the red in 2008.
There are a number of companies going ex-dividend today, including ARB Corp with a 10 cent fully franked dividend, Nick Scali, 6 cent fully franked and Sims Metal Management, 10 cent fully franked.
To the international scoreboard: The Dow Jones industrial lost 203 points, the S&P500 Index dropped 27 points and the NASDAQ fell 65 points.
European markets were also weaker: London’s FTSE down 86 points, Paris dropped 75 points and Frankfurt lost 121 points.
Asian markets were mixed: Hong Kong was closed yesterday. Tokyo’s Nikkei was down 155 points and China’s SSE Composite gained 25 points.
Looking at Metals: the price of Gold is down $8.60 to US$1000.70 an ounce for the December contract on Comex. Silver fell 22 cents to US$16.44 and copper is down 8 cents to US$2.74.
And the price of oil is up 21 cents to US$70.82 a barrel for November light crude in New York.
