The Australian share market is expected to open lower and extend its week of losses after US Stocks fell overnight as investors piled out of a downbeat quarter on growing fears that the global recovery is faltering.
In economic news: a weak jobs report weighed on the US market. ADP showed that 13,000 jobs were created in June but that figure was significantly less than the 61,000 forecast by economists and follows a revised gain of 57,000 in May. The ADP report also comes ahead of tomorrow all-important government employment report.
The Dow Jones Industrial Average fell 96 points at 9,774. The S&P 500 Index slipped 11 points 1,031 and the NASDAQ lost 26 points at 2,109.
European stocks closed higher; London’s FTSE is up 3 points, Paris rose 10 and Frankfurt added 13.
Asian markets were lower: Hong Kong’s Hang Seng is down 120, Tokyo’s Nikkei fell 188 and China’s Shanghai Composite is 29 points lower.
The Australian share market ended the financial year on a low. The S&P/ASX 200 Index dropped 44 points at 4,302 and on the futures market the SPI200’s down 30 points. Turning to currencies and the Aussie Dollar at 7:35AM was buying 84.06 US cents, 56.27 Pence Sterling, 74.32 Yen and 68.72 Euro cents.
In local economic news: The RBA’s index of commodity prices for June; ABS retail trade and building approvals for May; and the Performance of Manufacturing Index for June.
In business news: Shares in Fortescue Metals Group (ASX:FMG) closed 4.41% lower to $4.12. Fortescue Metals Group is threatening to step up its battle with BHP Billiton and Rio Tinto in the Federal Court over rail line access in Western Australia. Yesterday the Australian Competition Tribunal decided to back an earlier decision by Treasurer Wayne Swan to declare the Goldsworthy and Robe railways open to third parties. While that holds little appear to Fortescue, the Mount Newman line does, but the Tribunal backed an earlier decision not to grant access to that. The Tribunal also set aside a decision to let smaller miners use the Hamersley rail network. For years Fortescue has been seeking access to the lines and a company spokesperson said it will be appealing to the full Federal Court about the Mt Newman and Hamersley decisions. In the year to June 30 2009, Fortescue Metals achieved a $626 million net profit.
Shares in News Corporation (ASX:NWS) closed 1.84% lower at $13.85. The media group has won another tax case this time with the Federal Court upholding a ruling that News didn’t deliberately set out to illegally gain from a tax transaction. The decision validates a $1.5 billion capital loss claimed by News Corp through its 2005 global restructure. In dismissing the appeal brought by the Australia Tax Office, the court supported the ruling that the scheme was not set up specifically to avoid tax, but to achieve a commercial purpose desired by News Corp. The Australian Financial Review reports that News Limited spokesman Greg Baxter said the company was pleased with the result, and stressed it was the second time a court had sided with the company. News Corp posted over a $4 billion loss in the 2009 financial year.
To companies going ex-dividend nothing until Friday when Programmed Maintenance Services is going ex-dividend.
To commodities, and the price of gold rose $3.50 to US$1,245.50 an ounce for the June contract on Comex. Silver is up close to 8 cents to US$18.67 and copper is 2 cents higher at $2.94 a pound.
And the price of oil fell 31 cents to US$75.63 a barrel for August light crude in New York.
