The Australian share market is likely to open lower this morning following the worst session on Wall Street in three months.
US stocks fell sharply on Tuesday as concerns heightened that the global economic recovery could suffer if Europe’s efforts to contain Greece’s debt crisis don’t succeed.
Fears that China may go too far in its efforts to slow down its booming economy also weighed on the market.
Encouraging US economic news on housing and manufacturing failed to lift sentiment. Pending US home sales rose 5.3% to a five month high in March after climbing 8.3% in February. And a Commerce Department report found factory orders were 1.3% higher in April after rising 1.3% in March. Orders had been thought to fall 0.2%.
To the figures, the Dow Jones Industrial Average closed 225 points lower at 10,927. The S&P500 Index lost 29 points to 1,174 and the NASDAQ is 74 points weaker at 2,424.
European stock markets tumbled, with London’s FTSE down 142, Paris lost 139 points and Frankfurt declined 160 points.
Asian stocks also closed weaker, Hong Kong’s Hang Seng is down 48 points, Tokyo is closed and China’s Shanghai Composite is down 35 points.
The Australian share market hit a fresh eight-week low yesterday amid concern over the planned resources tax. The S&P/ASX 200 Index closed 48 points lower to 4,737 and on the futures market the SPI200 is down 102 points. On to currencies: the Aussie Dollar at 8.40AM was buying 91 US cents, 60.11 Pence Sterling, 86.09 Yen and 70.09 Euro cents.
In local economic news, the ABS is set to release building approvals data for March and the Australian Industry Group and Commonwealth Bank Australian Performance of Services Index for April is due for release.
To company news around this morning: Shares in Orica Ltd (ASX:ORI) fell 1.02% to $27.20 yesterday. The industrial explosives maker has bought out its joint venture partner to take full ownership of a mining services business in China. The company says it has acquired the remaining 45% stake in the Ruichy Minova venture in Beijing, however, the terms of the transaction are being kept confidential. Ruichy Minova makes mine support equipment, mainly for China’s coal mining industry. For the 12 months to September 30, 2009, Orica reported a $541.8 million profit.
Shares in Macmahon Holdings Ltd (ASX:MAH) rose 1.46% to $0.70 yesterday. The civil construction and mine contractor has been awarded a $150 million contract extension at Peabody Energy’s Eaglefield coal mine in Queensland. The two-and-a-half year extension will see the company continue to undertake a full scope of mine works, including the mining of coal, drill and blast activities and project management. CEO Nick Bowen says the win highlights the company’s strong performance in the mining sector and is the second coal contract Macmahon has been awarded in Queensland in recent months. The mine is 200km south west of Mackay in the coal-rich Bowen Basin. Macmahon Holdings booked a $17.16 million profit for the 12 months to June 30, 2009.
Taking a look at companies going ex-dividend, today we have GPT Group, the Asian Centre for Liver Diseases and Transplantation, Steamships Trading Company and Trust Company. Going tomorrow we have ANZ Bank.
To commodities: The price of gold lost $14.10 to US$1,168.60 an ounce for the May contract on Comex. Silver is down 99.5 cents at US$17.82 and copper is 11 cents lower at US$3.16.
And finally the price of oil lost $3.45 to US$82.74 a barrel for June light crude in New York.
