The Australian share market is expected to open weaker this morning following a disappointing finish on Wall Street on Friday as it wrapped up one of its worst trading months in history.
US stocks fell after ratings agency Fitch cut Spain’s credit rating, reigniting investor anxiety that financial troubles in the eurozone could hurt the global economic recovery.
In economic news out of the US, a Commerce Department report showed consumer income rose 0.4% last month, matching the gain in March. Personal spending for April was flat after rising 0.6% in the previous month. The University of Michigan’s consumer sentiment index for May increased to a read of 73.6 from 73.3 last month. It had been expected to fall to 73.2. And the Chicago Performance of Manufacturing Index fell to a read of 59.7 in May from 63.8 the month prior.
To the figures, and the Dow Jones Industrial Average lost 122 points to close at 10,137 on Friday, ending its worst May in 70 years. The S&P500 Index is down 14 points at 1,089 and the NASDAQ declined 21 points to 2,257.
European stocks finished mixed on Friday. London’s FTSE eased 7 points, Paris lost 10 and Frankfurt is up 9 points.
To our region, and Asian markets were also mixed. Hong Kong’s Hang Seng advanced 335 points, Tokyo’s Nikkei rose 123 and China’s Shanghai Composite is flat.
The Australian share market closed stronger on Friday. The S&P/ASX 200 Index rose 78 points to 4,458 and on the futures market the SPI200 is down 42 points. Turning to currencies and the Aussie Dollar at 8:40AM was buying 84.37 US cents, 58.38 Pence Sterling, 76.74 Yen and 68.69 Euro cents.
In local economic news: The Australian Bureau of Statistics releases data on the balance of payments and international investment position for March, as well as business indicators for the March quarter. And the Reserve Bank is set to release financial aggregates data for April.
To company news around this morning: Shares in Cape Lambert Resources Ltd (ASX:CFE) closed up 2.53% on Friday at $0.405. China Sci-Tech Holdings Ltd has approved a $135 million acquisition of the Lady Annie copper mine in Queensland from Cape Lambert Resources. The company revealed earlier this month that it intends to make a return of eight to 10 cents per share to shareholders following receipt of the sale funds. Cape Lambert also plans to use some of the funds to ramp up its drilling program at the Marampa iron ore project and to start drill assessment of the Pinnacle assets, both in Sierra Leone, West Africa. Cape Lambert Resources posted a profit of just over $229 million for fiscal 2009.
Transurban Group Ltd (ASX:TCL) shares finished 0.46% lower on Friday at $4.37. The toll road operator’s largest shareholder, CP2 Ltd, says it intends to hold on to its stake and push for board changes after its joint bid to buy the company was rejected. Bloomberg reports that CP2 Ltd chief Peter Doherty has revealed the company has no plans to exit Transurban and is seeking changes to the board. Upon rejecting the $7.2 billion takeover offer from CP2, in conjunction with Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, Transurban said it would go ahead with a $542.3 million share sale to fund its purchase of the Sydney Lane Cove Tunnel. The Takeovers Panel rejected an interim request from CP2 to halt the share sale on May 25 and is yet to decide whether it will grant a final order to stop the sale. Transurban Group booked a loss of $24.58 million in the 2009 financial year.
To companies going ex-dividend today, we have Eldorado, Ruralco Holdings, TFS Corporation and Technology One.
To commodities, and the price of gold rose $0.30 to US$1,212.20 an ounce for the June contract on Comex. Silver is down 5 cents at US$18.41 and copper also lost 5 cents to US$3.10.
And the price of oil slipped $0.58 to US$73.97 a barrel for July light crude in New York.
