We’re looking at a rough start for the Australian share market this morning after Wall Street and European stock markets tumbled on Friday.
Weak earnings from retailers and new Senate rules imposing limits on credit card fees contributed to the losses, while Europe’s economic woes continue to cause jitters among investors.
On Sunday, Greece’s Prime Minister said he would not rule out taking legal action against US banks which he believes deserve to hold some responsibility for the country’s debt crisis.
In economic news out of the US, retail sales for April rose 0.4%, lower than the revised 2.1% climb in sales in March.
According to the Federal Reserve, industrial production rose 0.8% in April, in line with forecasts.
And the University of Michigan’s consumer sentiment index rose to a read of 73.3 from 72.2. It had been expected to rise to 73.5.
To the figures, and the Dow Jones Industrial Average finished 163 points lower at 10,620 on Friday. The S&P500 Index fell 22 points to 1,136 and the NASDAQ is down 48 at 2,347.
European stock markets finished significantly lower. London’s FTSE lost 171 points, Paris also down 171 and Frankfurt lost 195 points.
To our local region and Asian markets were lower. Hong Kong’s Hang Seng is down 277 points, Tokyo’s Nikkei lost 158 and China’s Shanghai Composite is 14 points lower.
The Australian share market closed weaker on Friday on investor caution fuelled by weak offshore leads. The S&P/ASX 200 Index closed 42 points lower at 4,611 and on the futures market the SPI200 is down 79 points. On to currencies: the Aussie Dollar at 8:40AM was buying 88.55 US cents, 60.91 Pence Sterling, 81.81 Yen and 71.63 Euro cents.
In local economic news: The Australian Bureau of Statistics will release lending finance data for March.
To company news around this morning: Shares in Transurban Group Ltd (ASX:TCL) lost 1.03% to close at $4.80 on Friday. Investment fund CP2 says its joint bid for the toll road operator is unlikely to be raised any higher. CP2 managing director Peter Doherty has told the ABC that the offer of $5.57 per share, being made in conjunction with two Canadian pension funds, is full and fair. It’s not so good news for Transurban, which has rejected the bid as an inadequate price for control of the company given its performance and prospects. Transurban Group reported a loss of $24.58 million for the year to June 30, 2009.
Shares in BHP Billiton Ltd (ASX:BHP) fell 0.46% on Friday to close at $38.64. Chief executive Marius Kloppers says the company and fellow miner Rio Tinto remain committed to the proposed merger of their Pilbara iron ore operations. Despite the federal government’s proposed 40% tax on mining profits, Mr Kloppers says he is confident the two companies can still meet the December 31 deadline for the merger. Under the deal, which would create Australia’s second biggest company behind BHP itself, BHP will pay Rio $US5.8 billion to compensate it for contributing more iron ore production to the 50/50 joint venture. BHP Billiton posted a $7.243 billion profit for fiscal 2009.
There are three companies going ex-dividend today, BT Investment Management with a 5.5 cent fully franked dividend, Telecom of New Zealand with a 4.15 cent unfranked dividend and Westpac with a fully franked 65 cent dividend. To commodities, and the price of gold fell $1.40 to US$1,227.40 an ounce for the May contract on Comex. Silver is down 27 cents at US$19.20 and copper is 10 cents lower at US$3.12.
And finally oil fell $2.79 cents to a three-month low of US$71.61 a barrel for June light crude in New York.
