The Australian share market is likely to open stronger this morning following a positive finish on Wall St overnight, its highest close in close to a month on gains in industrial and technology shares.
US stocks rallied on Tuesday as concern over the impact of Europe’s debt woes on the US economy eased, commodity stocks rising as the dollar fell and the Euro strengthened.
Semi-conductor shares led the gains after two large Taiwanese chip producers said global chip demand would grow in the second half of the year.
In economic news out of the US, the Labor Department reported a 0.6% fall in import prices, the lowest drop in nearly a year according to CNN Money. Export prices rose 0.6%.
And the Empire manufacturing report, a look at manufacturing activity in the New York area, increased to 19.57 in May from 19.11 in April. Forecasts were for a rise to 20.
To the figures and the Dow Jones Industrial Average finished 214 points stronger at 10,405. The S&P 500 Index is up 26 points at 1,115 and the NASDAQ closed 62 points higher at 2,306.
European stocks were higher; London’s FTSE rose 16 points, Paris gained 35 and Frankfurt is up 50.
Asian markets were also higher on Tuesday. Hong Kong’s Hang Seng rose 10 points, Tokyo’s Nikkei gained 8 and China’s Shanghai Composite is closed.
The Australian share market closed steady on Tuesday. The S&P/ASX 200 Index closing at 4,505 and on the futures market the SPI200’s up 68 points. Turning to currencies and the Aussie Dollar at 7:40AM was buying 86.58 US cents, 58.45 Pence Sterling, 79.2 Yen and 70.23 Euro cents.
In local economic news coming out today: The ABS is to release dwelling unit commencements data for March, and the Westpac/Melbourne Institute indices of economic activity are also due out today.
In company news around this morning: Shares in media conglomerate News Corporation (ASX:NWS) dropped 2.4% to $17.89 yesterday. The company has launched a $13.4 billion takeover bid for British Sky Broadcasting Group. Rupert Murdoch’s global media company is offering to acquire all the shares it does not already own in the Pay TV provider, for 700 pence per share. The offer was increased from 675 pence a share after BSkyB rejected the original price saying it undervalued the company. However, independent directors of BSkyB say 700 pence a share is still too low but that they would accept 800 pence a share. News Corp, who owns 25% of local Pay TV operator Foxtel, says that the two companies have not worked out a price yet but both parties have agreed to work together to proceed with the regulatory process. News Corp booked a $4.16 billion loss for the 2009 financial year after profits the two years previous.
Shares in global miner BHP Billiton Ltd (ASX:BHP) fell 0.49% to $38.39 on Tuesday, and shares in fellow mining giant Rio Tinto Ltd (ASX:RIO) gained 0.46% to $69.42 yesterday. According to a Fairfax report West Australian Premier Colin Barnett is considering slapping the two top Aussie miners with a new royalty. Mr Barnett has been in negotiations with the two companies to try and bring the 3.75% iron ore royalty they both pay more in line with the Mining Act rate of 5.625%. Both Rio and BHP are reluctant to agree to the deal, which would see them pay a royalty in line with what their peers like Fortescue Metals Group and Atlas Iron pay. Fairfax says Mr Barnett has warned the miners that he will use their proposed Pilbara iron ore joint venture, which requires the amendment of state agreements, as leverage to achieve the royalty. A deal was expected to be reached by July 1, however it appears this will be unlikely and so Mr Barnett is considering legislation to enforce the new royalty. In fiscal 09 BHP earned $7.24 billion and Rio Tinto’s calendar 2009 profit came to $5.43 billion.
Checking ex-dividends, and while there are no companies going ex-dividend today, coming up tomorrow we have PaperlinX SPS Trust and Thorn Group, and on Friday is Metcash.
And I would just like to make a quick correction, yesterday we reported that Corporate Express went ex-dividend when they in fact did not.
To commodities, and the price of gold rose $9.90 to US$1,233.20 an ounce for the June contract on Comex. Silver is up 17 cents at US$18.57 and copper is up a cent to US$3 a pound.
And the price of oil is up $1.82 to US$76.94 a barrel for July light crude in New York.
