The Australian sharemarket is likely to open weaker after Wall Street retreated following lower-than-expected growth in the United States' services sector. Major commodities also fell overnight.
In economic news out of the US, the Institute for Supply Management said its index of service activity rose to 50.5 in January from 49.8 in December.
The January reading was below the level of 51 that analysts polled by Thomson Reuters had been expecting. Any number above 50 signals growth.
Checking the figures, the Dow Jones Industrial Average lost 26 points to 10,271. The S&P500 Index fell 6 points to 1,097 and the NASDAQ was relatively steady at 2,191.
To other international markets, European stocks fell. London’s FTSE dropped 30 points, Paris lost 19, and Frankfurt is down 38 points.
Asian stocks gained yesterday with Hong Kong’s Hang Seng up 450 points, Tokyo’s Nikkei advanced 33 and China’s Shanghai Composite rose 69 points.
Back to the local market now and Aussie stocks closed higher on Tuesday. The S&P/ASX 200 Index finished 43 points stronger at 4,648 and on the futures market the SPI200’s down 27 points.
On to currencies: the Aussie Dollar at 8:35AM was buying 88.28 US cents, 80.33 Yen, 63.52 Euro cents and 55.53 Pence Sterling.
In economics news, the Australian Bureau of Statistics releases retail trade data for December and building approvals also for December.
In company news about this morning: News Corporation (ASX:NWS) shares closed stronger yesterday adding 5.39% to $17.78. New Corp has raised its full-year earnings forecast on the back of strong earnings from its film and cable divisions and a recovery in advertising markets. Without giving a definitive figure, News Corp expects this year’s earnings to grow by about 20%, up from its previous guidance for a single digit increase. The forecasts are based on an adjusted 2009 operating profit of $3.88 billion, which includes one off items. News Corp posted a $4 billion loss in 2009.
GrainCorp (ASX:GNC) shares gained 1.03% yesterday to close at $5.91. GrainCorp appears to have restored some investor confidence in its purchase of United Malt Holdings. Yesterday GrainGorp held an investor day in Victoria. The Australia Financial Review quotes Simon Conn from Investors Mutual as saying that UMH presentations from its chief executive were impressive and comprehensive adding that the company has managed to turn the commodities business around into a much more customer focused business with long term contracts. GrainCorp posted a 63 million net profit in 2009.
Taking a look at ex-dividends: coming up on tomorrow is Australian Foundation Investment Company with an 8 cent fully franked dividend and Westfield with its dividend to be announced.
To commodities: Gold was softer, down $5.60 to US$1,112.40 an ounce for the April contract on Comex. For the March contract silver fell 16 cents to US$16.58 and copper is down 11 cents at US$2.98.
The price of oil slipped 43 cents to US$76.80 a barrel for March light crude in New York.
