The Australian share market looks set to open higher this morning after receiving some positive leads from offshore markets overnight.
Wall St managed to recover from earlier losses in the session, to finish higher as bargain hunters snapped up previously battered stocks setting aside fears over Europe’s debt situation and the effect it could have on the global economy.
In economic news out of the US on Monday, the Empire State Manufacturing Survey’s index dropped to a read of 19.1 in May from 31.9 in April. The survey is a look at manufacturing activity in the New York region. Economists expected a fall to 30.
The US Treasury reported that China increased its holding of US debt in March by 2% to $895.2 billion. Overall foreign holdings of Treasury securities rose 3.5% to $3.88 trillion.
And automaker General Motors posted its first quarterly profit in close to three years, reporting profit of $865 million on the back of $31.5 billion in revenue.
To the figures, and the Dow Jones Industrial Average finished 6 points higher at 10,626 on Monday. The S&P500 Index gained a point to 1,137 and the NASDAQ is 7 points higher at 2,354.
European stock markets finished mixed. London’s FTSE is flat, Paris dropped 17 points and Frankfurt added 10 points.
Turning to Asian markets, and Hong Kong’s Hang Seng is down 430 points, Tokyo’s Nikkei lost 227 and China’s Shanghai Composite is 137 points lower.
The Australian share market closed deep in the red on Monday wiping close to $40 billion off the value of Australian stocks. The S&P/ASX 200 Index closed 144 points lower at 4,467 and on the futures market the SPI200 is up 29 points. On to currencies: the Aussie Dollar at 8:45AM was buying 87.78 US cents, 60.59 Pence Sterling, 81.27 Yen and 70.08 Euro cents.
In local economic news: Minutes from the RBA’s May 4 monetary policy meeting are to be released today, as well as the HIA affordability report for the March quarter, and the Australian Chamber of Commerce and Industry small business survey.
To company news around this morning: Shares in mining giant Rio Tinto Ltd (ASX:RIO) lost 5.66% to $64.15 yesterday. The bribery case involving Rio employees in China that caught the nation’s attention, has come to an end after three employees lost their appeals in the Higher People’s Court of Shanghai. According to a Fairfax report, lawyers for the three employees have said the men will not make further appeals and says there is nothing more they can do to help them. Stern Hu did not appeal, and now all face prison sentences of a minimum seven years. In other news, a Reuters report says the miner expects to see a 15% drop in copper production this year. Rio Tinto earned $5.4 billion in the 2009 calendar year.
Shares in fellow mining giant BHP Billiton Ltd (ASX:BHP) fell 4.53% to $36.89 on Monday. The miner intends to hold shareholder meetings around the country to warn investors of the potential impact the federal governments mining tax could have. In a letter to shareholders yesterday, chairman Jac Nasser said BHP is assessing its Australian operations and investment plans as details of the proposed tax become clearer. BHP says it is in the process of planning shareholder information sessions around Australia so that the management team can update shareholders on BHP’s plans and prospects. BHP earned $7.24 billion in fiscal 2009.
Taking a look at ex-dividend’s, and while there are no companies going ex-dividend this week, coming up next week we have Orica and SP AusNet on Wednesday. To commodities, and the price of gold rose $0.30 to US$1,227.70 an ounce for the May contract on Comex. Silver is down 37 cents at US$18.84 and copper is 20 cents lower at US$2.92.
And finally oil fell $1.53 cents to US$70.08 a barrel for June light crude in New York.
