The Australian share market is likely to open weaker this morning following a negative lead from Wall St overnight.
Returning from the Memorial Day public holiday, US stocks took a tumble on Tuesday as news that BP could face criminal charges over the disastrous oil spill in the Gulf of Mexico with the latest attempt to plug the leaking pipes failing.
In economic news out of the US, the Institute for Supply Management’s manufacturing index fell to a read of 59.7 in May from 60.4 in April. Economists however, expected a fall to 58.9. Any read above 50 indicates expansion in the sector.
And the Government reported that construction spending rose 2.7% in April after a 0.4% rise in March. Expectations were for a rose 0.1% rise.
To the figures, and the Dow Jones Industrial Average lost 113 points to close at 10,024 on Tuesday. The S&P500 Index is down 19 points at 1,071 and the NASDAQ declined 35 points to 2,222.
European stocks finished mixed on Tuesday. London’s FTSE lost 25 points, Paris declined 4 and Frankfurt is up 17 points.
To Asian markets. Hong Kong’s Hang Seng dropped 268 points, Tokyo’s Nikkei fell 57 and China’s Shanghai Composite slipped 24.
The Australian share market closed lower on Tuesday. The S&P/ASX 200 Index fell 17 points to 4,413 and on the futures market the SPI200 is down 44 points. Turning to currencies and the Aussie Dollar at 8:30AM was buying 83.32 US cents, 56.83 Pence Sterling, 75.88 Yen and 68.1 Euro cents.
In local economic news: The ABS is to release GDP figures for the March quarter.
In company news around this morning: Shares in mining giant BHP Billiton Ltd (ASX:BHP) fell 0.13% to $38.19 yesterday. The miner has been forced to halt the operation of drill rigs in the Gulf of Mexico after new restrictions were introduced as a result of the BP oil spill disaster. According to the Australia Financial Review drilling at the Atlantis and Shenzi fields have been halted and an exploration well at the Deep Blue prospect, which the miner has a stake in, has also been suspended. Last week US President Barack Obama ordered the immediate suspension of all drilling in the Gulf of Mexico and introduced a six month moratorium on the drilling of new wells in the region. BHP earned $7.24 billion in financial year 2009.
Shares in fellow miner Rio Tinto Ltd (ASX:RIO) declined 0.39% to $66.88 on Tuesday. Continuing the heated discussions surrounding the Federal Government’s Resource’s Super Profits Tax, Rio says that while it supports tax reform in Australia, it is calling for commonsense saying that it pays enough tax. The Australian Financial Review reports CFO Guy Elliot saying the miner already pays 35% in tax and believes this to be an eminently sensible number. The paper says Rio is all for tax reform, but reform that promotes investment and is pushing for further consultation with the Federal Government. In 2009, Rio Tinto earned $5.4 billion.
To commodities, and the price of gold rose $12.60 to US$1,224.80 an ounce for the June contract on Comex. Silver is up 13 cents at US$18.54 and copper fell 4 cents to US$3.05.
And the price of oil slipped $1.39 to US$72.58 a barrel for July light crude in New York.
