The Australian share market looks like it may be in for a weaker start this morning following falls on overseas markets overnight after ratings agencies warned of debt problems in Dubai and Greece, and weak manufacturing reports from Germany and the UK.
US stocks fell overnight, pressured by a stronger dollar, weaker oil and gold prices and some disappointing profit results from McDonald’s, 3M and Kroger.
Dubai’s debt woes were again in the spotlight after reports that a credit rating agency has cut its ratings on six Dubai state-connected companies, according to CNN Money.
And US President Barack Obama unveiled a new jobs plan and stimulus proposal, saying that he wants to expand tax breaks for small businesses invest in infrastructure and give consumers rebates for making their homes more energy efficient.
The Dow Jones Industrial Average lost 104 points to 10,286. The S&P500 Index is down 11 to 1,092 and the NASDAQ fell 17 points to 2,173.
European markets were lower. London’s FTSE down 88 points, Paris dropped 55 points and Frankfurt declined 96.
Asian markets were weaker: Hong Kong’s Hang Seng fell 264 points. Tokyo’s Nikkei dropped 27 and the Shanghai Composite declined 35 points.
Back to the local market now and Australian stocks ended flat on Tuesday. The S&P/ASX 200 Index closed 6 points weaker at 4,671. Looking at the futures market the SPI200’s down 54.
Looking at currencies; the Aussie Dollar at 8.50AM is buying 90.5 US cents, 79.98 Yen, 61.53 Euro cents and 55.55 Pence Sterling.
In economic news today: ABS international trade in goods and services for October, ABS housing finance data also for October and the Westpac/Melbourne Institute survey of consumer sentiment for December. In company news about this morning: Shares in global miner BHP Billiton Ltd (ASX:BHP) rose 1.08 per cent to $41.05 yesterday. According to a report in The Australian Financial Review the miner has sold its Ravensthorpe laterite nickel mine to First Quantum Minerals of Canada. Ravensthorpe cost the miner more than US$2.2 billion to build but was closed after just two months following a collapse in nickel prices during the global financial crisis. At the beginning of the year BHP wrote down the value of both Ravensthorpe and its Yabulu refinery to zero. Yabulu was sold to Clive Palmer a mining entrepreneur. BHP’s net profit after tax for 2009 came in at $7.2 billion.
Shares in coal miner Felix Resources Ltd (ASX:FLX) added 0.06 per cent to $16.87 yesterday. Shareholders have approved Yanzhou Coal Mining’s $3.5 billion takeover over of the company. Shareholders will receive $16.95 a share from Yanzhou plus $1 in fully franked dividends. On Monday the company announced that the deal had received Chinese regulatory consent from the National Development and Reform Commission and it is now waiting on approval from the China Securities Regulatory Commission. The company is now seeking approval for the deal in Australia. Felix Resources fiscal 2009 net profit was $267.43 million.
Checking ex-dividends, and there is just one company going ex-dividend today and that is Marbletrend Group with a 0.5 cent fully franked dividend. Coming up tomorrow is Metcash and Premium Investors.
Looking at metals: Gold fell $20.60 to US$1,143.40 an ounce for the February contract on Comex. For the March contract Silver dropped 58 cents to US$17.79 and copper is 4 cents lower at US$3.17.
And the price of oil is $1.31 lower at US$72.62 a barrel for January light crude in New York.
