The Australian share market is expected to open stronger this morning as politics is set to take centre stage with Prime Minister Kevin Rudd set to be replaced by his deputy Julia Gillard.
In the US overnight, stocks finished mixed as investors struggled to balance the Federal Reserve's latest monetary statement, a weak housing market report and a sell-off in commodity prices amid the stronger euro.
Looking closer at the latest US economic news: the Commerce Department reported new home sales fell 32.7% to a seasonally adjusted annual rate of 300,000 in May, which was the first month following the end of the homebuyer tax credit.
The Dow Jones Industrial Average finished 5 points stronger at 10,298. The S&P 500 Index fell 3 points 1,092 and the NASDAQ lost 8 points at 2,254.
European stocks closed lower; London’s FTSE lost 68 points, Paris is down 64 and Frankfurt tumbled 65.
Asian markets were mixed: Hong Kong’s Hang Seng is up 38, Tokyo’s Nikkei fell 189 and China’s Shanghai Composite lost 19 points.
The Australian share market closed weaker yesterday as investors sold off banking and mining stocks. The S&P/ASX 200 Index down 72 points at 4,486 and on the futures market the SPI200’s up 8 points. Turning to currencies and the Aussie Dollar at 7:35AM was buying 87.4 US cents, 58.41 Pence Sterling, 78.58 Yen and 70.96 Euro cents.
In local economic news: The Westpac ACCI survey of industrial trends.
In business news: Shares in Qantas (ASX:QAN closed 2.08% lower to $2.35 yesterday. Qantas Airways is said to be planning to scale back its cheap economy flights within Australia in a move to encourage more travellers to upgrade their fares. Qantas hopes the little nudge towards an upgrade will help it achieve higher profits. The airline is believed to have no plans to increase fares however it is planning on changing the mix of price grades that it currently offers which include Red e-deals and flexi saver. Qantas Chief Financial Officer Gareth Evans told the Financial Review that the airline can change its fare mix because demand is increasing for business travel and first class. A stronger Australian dollar is also helping to boost demand in these classes. In the year to June 30 2009, Qantas posted a $117 million net profit.
Shares in Telstra (ASX:TLS) closed 0.92% higher yesterday at $3.29. Telstra is among a group of companies which have been asked to tender for the contract to build the National Broadband Network. Some of the 21 companies involved in the tender include Downer EDI, UGL and Leighton Holdings. The Federal Government has pledged $43 billion towards the project, which is aimed at revolutionising Australia's generally slow and expensive Internet service. It has promised to invest $26 billion over seven years in developing the network itself. The tendering process for design and construction is expected to be complete by the end of the year. In the year to June 30 2009, Telstra posted just over a $4 billion net profit.
To commodities, and the price of gold fell $5.80 to US$1,234.10 an ounce for the June contract on Comex. Silver is down 44 cents at US$18.45 and copper is down 5 cents at $2.93 a pound.
And the price of oil slipped $1.50 to US$76.35 a barrel for July light crude in New York.
