The Australian share market is likely to open slightly higher this morning after mixed leads from offshore markets overnight, investors cautious as they mull over the federal government’s 2010/2011 budget announced last night. A jump in the price of gold may give the local gold miners a lift today.
US stocks closed a volatile session mostly lower overnight, as questions were raised as to whether the $1 trillion rescue plan for Europe will work.
According to CNN Money, Greece requested $18.4 billion in funds from the EU on Tuesday and is reportedly to receive a further $7 billion from the International Monetary Fund on Wednesday.
The money will help Greece meet its May 19 deadline to pay back around $11 billion in debt.
In economic news out of the US, the Commerce Department reported a 0.4% rise in wholesale inventories in March following a 0.6% rise in February.
Turning to the figures now, and the Dow Jones Industrial Average finished 37 points lower at 10,748. The S&P500 Index fell 4 points to 1,156 and the NASDAQ is steady at 2,375.
European stock markets were mixed London’s FTSE down 53, Paris lost 27 points and Frankfurt rose 20 points.
Asian markets fell on Tuesday, Hong Kong’s Hang Seng dropped 280 points, Tokyo’s Nikkei lost 120 and China’s Shanghai Composite fell 51 points.
To the local market, and Aussie stocks closed lower on Tuesday. The S&P/ASX 200 Index closed 52 points weaker at 4,548 and on the futures market the SPI200 is up 20 points. On to currencies: the Aussie Dollar at 8:45AM was buying 89.38 US cents, 59.93 Pence Sterling, 82.69 Yen and 70.85 Euro cents.
In economic news, The ABS is to release housing finance figures for March, the RBA credit/debt card data for March is also out and the Commonwealth Bank of Australia trading update is out today as well.
To company news around this morning: Shares in iron ore miner Fortescue Metals Group (ASX:FMG) fell 5.02% to $4.16 on Tuesday. The potential effects of the Governments proposed 40% mining profits tax are starting to come to light, with figures released by Goldman Sachs JBWere showing that Aussie miner Fortescue could lose up to a third of its earnings if the tax comes into fruition. According to a Fairfax report, Goldman Sachs JBWere predicts that Fortescue will take a 33% hit on an earnings per share basis by 2018, with 29% of its value likely to be wiped from the company. Goldman Sachs says the mining tax will have a greater effect on Fortescue because all of its operations are in Australia and so it has greater exposure to the proposed tax. Fairfax reports that Goldman forecasts an earnings per share effect on Rio Tinto of 18% in 2018 and 14% on BHP. Fortescue Metals Group earned $626.13 million for the fiscal 09 year following a massive loss the year before.
Shares in Aussie miner TNG Ltd (ASX:TNG) rose 15.09% to just over $0.06 yesterday. The resource company has sold its Manbarrum zinc-lead-silver project in the Northern Territory to a Chinese company. TNG says it sold the project to privately owned Chinese resource company Teng Fei Mining for $8.5 million in cash. In addition the company says it will receive a 2% net smelter return on any future mining production from the Manbarrum tenements. TNG says the funds will be used to progress the exploration and development of its prospective Mount Peake Vanadium project in the Northern Territory and its portfolio of other mineral projects in Australia. TNG posted a loss for the 2009 financial year.
There are two companies going ex-dividend today: Australian Governance Masters Index Fund with a 1 cent fully franked dividend, and E & A with a 1.5 cent fully franked dividend. Coming up on Friday is Incitec Pivot with a 1.8 cent unfranked dividend. To commodities, and the price of gold added $19.50 to US$1,219.90 an ounce for the May contract on Comex. Silver is up 74 cents at US$19.27 and copper is 2 cents lower at US$3.19.
And finally oil dropped $0.43 to US$76.37 a barrel for June light crude in New York.
