Despite yesterday’s strong gains, the Australian share market is in for a weak start after mixed leads from overseas markets.
The US stock market closed lower overnight after a mixed session as the latest economic news showed stronger factory orders but disappointing November home sales.
In particular, the National Association of Realtors said pending home sales fell 16 per cent in November to 96.0, after rising for nine months. It was a far sharper drop than had been expected.
Partially offsetting that data was a Commerce Department report showing new factory orders rose 1.1 per cent in November, their third straight monthly increase. The data suggests the manufacturing sector will continue to support an overall economic recovery.
Looking closer at Wall Street, the Dow Jones Industrial Average lost 12 points to 10,572. The S&P500 Index added 4 at 1,137 and the NASDAQ finished steady at 2,309.
Further abroad, European markets were mixed. London’s FTSE rose 22 points and Paris slipped 1 point, and Frankfurt fell 16 points.
Asian markets were higher: Hong Kong’s Hang Seng gained 456 points, Tokyo’s Nikkei add 27 and China’s Shanghai Composite rose 38 points.
Back to the local market and Australian stocks closed stronger yesterday after rising commodity prices drove gains in the resources sector. The S&P/ASX 200 Index finished 48 points higher at 4,924, looking at the futures the SPI200’s up 10.
Looking at currencies; the Aussie Dollar at 8:30AM is buying 91.22 US cents, 83.66 Yen, 63.48 Euro cents and 57.01 Pence Sterling.
In local economic news, the Australian Chamber of Commerce and Industry releases its survey of investor confidence for the December quarter. The Federal Chamber of Automotive Industries publishes new vehicle sales data for 2009. The Australian Industry Group-Commonwealth Bank performance of services index for December will be published. And the Australian Bureau of Statistics releases its building approvals data for November.
In company news about this morning: Shares in Westpac Banking Corp (ASX:WBC) closed higher yesterday, adding 0.83% to $25.51. It seems that Westpac is losing some of its customers who have been angered by the bank’s big interest rate rise. Australia’s largest mortgage broker AFG, is saying that a "large proportion" of its business in December came from Westpac customers switching to other lenders in protest at Westpac's outsized December rate rise. Westpac's decision to increase its variable rates by 45 basis points, compared with the Reserve Bank's 25-point rise has opened the biggest gap between the rates of the big banks. Westpac achieved a $3.4 billion net profit in 2009.
Shares in Telstra Corp (ASX:TLS) closed lower yesterday, slipping 0.29% to $3.44.The Australian Financial Review is reporting the Federal Government may get $1.5 billion from selling broadcasting spectrum for 4G mobile phone services, which is likely to keep up the competitive pressure on Telstra. Lawmakers have threatened to stop Telstra buying spectrum for 4G unless it agrees to a separation plan as part of plans to build a national broadband network. AFR reports that Telstra, which is expected to formally detail its plan to the government later this month, may have already agreed to split its retail and wholesale operations in order to participate in the network. Telstra’s 2009 net profit was $4 billion.
Looking at companies going ex dividend: Just the one today and its Emerging Leaders Investment with a 3.75 cent fully franked dividend.
Looking at metals: Gold is up 40 cents to US$1,118.70 an ounce for the February contract on Comex. For the March contract Silver rose 34 cents to US$17.80 and copper is up 1 cent at US$3.41.
And the price of oil is 26 cents higher at US$81.77 a barrel for February light crude in New York.
