Marginal gains on Wall St overnight are likely to help the local share market open in positive territory this morning, although falls in oil and precious metals prices may put pressure on the miners and energy stocks today.
US stocks managed to squeeze out gains overnight as optimism for the economy helped lift consumer and economically sensitive stocks like Home Depot and McDonalds.
However declines in financial stocks limited gains during the session on Tuesday.
In economic news out of the US, according to the Commerce Department, America’s trade deficit for February rose to US$39.7 billion from US$37 billion in January. The result was not as bad as economists expected, forecasting a deficit of US$38.5 billion.
Looking at the figures now, and the Dow Jones Industrial Average finished 13 points higher at 11,019. The S&P500 Index closed flat at 1,197 and the NASDAQ rose 8 points to 2,466.
European markets were lower, London’s FTSE declined 16 points, Paris fell 19 and Frankfurt dropped 20 points.
Asian stocks were mixed on Tuesday, Hong Kong’s Hang Seng slipped 35 points, Tokyo’s Nikkei fell 91 points and China’s Shanghai Composite gained 32 points.
The Australian share market closed lower on Tuesday. The S&P/ASX 200 Index finished 33 points weaker at 4,952 and on the futures market the SPI200 is up 21 points. On to currencies: the Aussie Dollar at 8:25AM was buying 92.84US cents, 60.4 Pence Sterling, 86.53 Yen and 68.23 Euro cents.
In local economic news, out today is the Westpac/Melbourne Institute survey of consumer sentiment.
To company news around this morning: Shares in provider of investment management services Henderson Group plc (ASX:HGG) lost 0.82% to $2.43 yesterday. The company has confirmed recent media speculation that it is in talks to acquire part of the funds management business of US bank SunTrust. The company says it is in discussions regarding a potential acquisition of certain businesses of RidgeWorth Capital Management, the US asset manager owned by SunTrust Banks. Henderson Group says discussions with SunTrust regarding a possible transaction are ongoing and there is no certainty that any transaction will proceed. If a deal eventuates reports are it could fetch as much as $400 million. Henderson Group posted a profit for the 2009 calendar year.
Shares in Westpac Banking Corp (ASX:WBC) fell 0.32% to $27.75 on Tuesday. CEO Gail Kelly says she expects interest rates to rise in the foreseeable future before pausing. Ms Kelly told media at a Trans-Tasman Business Circle lunch that she expects that we will see another interest rate rise again soon, then the RBA will pause for a while. The head of Westpac also warned about overheating in the property market in Melbourne, but says rising interest rates will moderate this heat. Ms Kelly’s comments echo those of RBA Governor Glenn Stevens who cautioned borrowers against relying on property investment as a riskless, easy, guaranteed way to prosperity. Westpac earned $3.4 billion for the year to September 30, 2009.
Taking a look at companies going ex-dividend today: and there is just one again today, and that is Tamawood with an 8 cent fully franked dividend. Coming up tomorrow is Ausdrill and FFI Holdings, and on Friday is Washington H. Soul and Pattinson.
To commodities: The price of gold fell $8.80 to US$1,152.80 an ounce for the May contract on Comex. Silver dropped 16.5 cents to US$18.24 and copper is up just over 3.5 cents at US$3.60.
And oil declined 29 cents to US$84.05 a barrel for May light crude in New York.
