Outlook: Shares could open lower

Market Reports

Australian stocks are likely to open lower this morning following a negative lead from Wall Street as Greece’s debt crisis and the Henry tax review weigh on investors.

A massive oil spill in the Gulf of Mexico dragged down US stocks on Friday as investors digested the implications for oil rig operations, shipping and the revenue of seafood companies.

Goldman Sachs shares plunged after news leaked that New York prosecutors were working on a criminal case against the investment firm.

Local resource stocks could take a tumble when the market opens this morning after news the federal government will impose a mining profits tax following the release of Ken Henry's review of the nation's tax system.

To more positive economic news out of the US, the Commerce Department said the economy grew at a 3.2% annual rate in the first quarter of 2010, just short of the 3.3% rate that had been forecast.

And The University of Michigan’s final reading on April consumer sentiment was revised to a read of 72.2 from 69.5, beating forecasts for a revision to 71.

To the figures now, the Dow Jones Industrial Average closed 159 points lower at 11,009. The S&P500 Index fell 20 points at 1,187 and the NASDAQ is down 51 at 2,461.

European stock markets closed weaker. London’s FTSE lost 65 points, Paris was down 24 points and Frankfurt lost 9 points.

Asian stocks were higher. Hong Kong’s Hang Seng is up 330 points, Tokyo’s Nikkei rose 133 points and China’s Shanghai Composite is up 2 points.

The Australian share market finished moderately higher on Friday with a pleasing profit from Macquarie Group boosting the financial sector and a higher oil price underpinning resource stocks. The S&P/ASX 200 Index closed 22 points stronger to 4,807 and on the futures market the SPI200 is down 62 points. On to currencies: the Aussie Dollar at 8:45AM was buying 92.48 US cents, 60.42 Pence Sterling, 86.95 Yen and 69.44 Euro cents.

In local economic news, the Reserve Bank of Australia publishes the index of commodity prices for April today, the Australian Bureau of Statistics releases the house price index for the March quarter, the Australian Industry Group/PricewaterhouseCoopers performance of manufacturing index for April is due for release and so is the TD Securities-Melbourne Institute inflation gauge for April.

To company news around this morning: Aditya Birla Minerals Ltd (ASX:ABY) shares closed 2.26% lower on Friday to $1.08. The copper miner has reported a net profit of $61.4 million for the 12 months to March 31. The result reverses the major loss of $76 million the company posted in the previous corresponding period. The significant turnaround was made despite a 15% drop in copper concentrate production. Aditya Birla’s board did not declare a dividend for the period.

Shares in ANZ Bank Ltd (ASX:ANZ) closed steady on Friday at $24.20. The bank says it has ruled out making an offer for AXA Asia Pacific, opening the door for National Australia Bank to try to rescue its blocked $13 billion bid for the wealth manager. The Australian reports that NAB is believed to have begun sounding out the corporate regulator in an attempt to get back into the bidding race. NAB is thought to be quietly trying to find common ground with the ACCC by working through its objections to the deal. ANZ’s net profit for the 12 months to September 30, 2009, was $2.943 billion.

To companies going ex-dividend today, we have Alcoa, Anglo Pacific Group, Henderson Group, United Overseas Australia and Waterco.

To commodities: The price of gold rose $11.70 to US$1,180.10 an ounce for the May contract on Comex. Silver rose 6 cents to US$18.61 and copper is steady at US$3.34.

And finally the price of oil gained $0.98 to US$86.15 a barrel for June light crude in New York.


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