The Australian share market is likely to open marginally higher this morning after a strong lead from Europe and higher fourth quarter US GDP numbers.
But investors will be cautious as they turn their attention to the Reserve Bank of Australia (RBA), which is tipped to raise the official interest rate after its monthly board meeting tomorrow.
US stocks closed slightly higher on Friday with investors regaining hope for an economic recovery after a surprise rise in gross domestic product growth, but remaining unsettled by a shaky housing market.
In global markets, concerns about Greece’s debt woes returned last week, but lessened on Friday after Greece’s prime minister declared he would take action to gain control of the country’s finances.
Revised data on economic growth from the US Commerce Department reveals the economy grew a better-than-expected 5.9% in the December quarter. Growth in GDP had initially been estimated at a 5.7% annualised rate.
In not so positive economic news, existing home sales for January in the US fell to a 5.05 million unit annual rate from a revised 5.44 million unit rate in December, according to the National Association of Realtors.
Checking how US Markets finished up on Friday - the Dow Jones Industrial Average rose 4 points to 10,325 points. The S&P500 Index gained 2 points to 1,104 and the NASDAQ was up 4 points to 2,238.
To other international markets, European stocks were higher on Friday. London’s FTSE rose 76 points, Paris was up 68 and Frankfurt gained 66.
Asian stocks closed mixed with Hong Kong’s Hang Seng up 209 points, Tokyo’s Nikkei rising 24 and China’s Shanghai Composite losing 9 points.
The Australian share market closed higher on Friday. The S&P/ASX 200 Index rose 44 points to 4,638 and on the futures market the SPI200 was up 16 points. On to currencies: the Aussie Dollar at 8:40AM was buying 89.75 US cents, 59.2 Pence Sterling, 79.76 Yen and 65.82 Euro cents.
In economic news, the Australian Bureau of Statistics (ABS) is set to release its balance of payments and international investment position for the December quarter, as well its business indicators for the fourth quarter.
The Reserve Bank of Australia (RBA) is expected to release its index of commodity prices for February, and the Housing Industry Association’s home sales data for January is also due today.
To company news around this morning: Shares in Australian Infrastructure Fund (ASX:AIX) closed 2.21% higher to $1.85. The company, which owns stakes in some of Australia’s biggest airports, is considering a sale of some of its assets to ramp up the fund’s focus on the improving travel sector. The fund has told the Australian Financial Review it may spin-off some of its smaller assets following a decision in 2003 to invest mainly in transport assets. Earnings from Australia Infrastructure Fund’s portfolio of assets rose 8.3% to $40.9 million for the first half of fiscal 2010. The company has invested millions into developing terminals in Melbourne and the Gold Coast to cater for low-cost carriers such as Jetstar and Tiger Airways, and traffic volumes across its Australian airports rose 6.3% during the first half. Australian Infrastructure Fund posted a profit of $100.59 million for fiscal 2009. Toy wholesaler Funtastic (ASX:FUN) shares are steady at $0.215. The company says it hopes to return to profitability in 2010 after reporting a loss for 2009 of $58.1 million – down 14.2% on the year before. Revenue fell 17.7% to $229.9 million after the stronger Australian dollar and weaker than expected trading over the Christmas period damaged sales in fiscal 2009. Analysts had expected losses in the company to continue to mount as it prepares to sell down its toy inventory, spin off its apparel business and recover from ABC Learning’s collapse. Funtastic reported a loss of $50.85 million for 2008.
To commodities: Gold jumped $10 to US$1,118.50 an ounce for the April contract on Comex. For the May contract Silver rose 37 cents to US$16.51 and copper gained 6 cents at US$3.27.
And finally, oil gained ground, rising $1.32 to US$79.66 a barrel for April light crude in New York.
