The Australian stock market is expected to open higher, influenced by a positive finish on Wall Street and firmer commodities prices.
US stocks rallied overnight after better-than-expected company earnings helped to reassure investors about the pace of the economic recovery, just a day after Federal Reserve Chairman Ben Bernanke said the outlook was “unusually uncertain”.
The latest economic news was also helped lift the market. A better than expected housing report came out from the National Association of Realtors which found existing home sales fell to a seasonally adjusted annual rate of 5.37 million units in June, down from 5.66 million in May.
On the jobs front, the Labor Department reported new claims for unemployment rose to 464,000 from a two-year low of 427,000 in the week before. That rise was actually more than many economists had expected.
And continuing claims fell to 4,487,000 - beating economists’ expectations - from the 4,710,000 in the previous week.
The Dow Jones Industrial Average rose 202 points weaker at 10,322. The S&P 500 Index gained 24 points at 1,094 and the NASDAQ is up 59 points at 2,246.
European stocks were higher; London’s FTSE rose 99 points, Paris is up 107 and Frankfurt jumped 152 points.
Asian markets were mixed: Hong Kong’s Hang Seng is up 102 points, Tokyo’s Nikkei is down 58 and China’s Shanghai Composite added 27 points.
The Australian share market closed lower, dragged down by financial stocks. The S&P/ASX 200 Index fell 38 points at 4,375 and on the futures market the SPI200 is up 64 points. Turning to currencies and the Aussie Dollar at 7:35AM was buying 89.34 US cents, 58.57 Pence Sterling, 77.73 Yen and 69.34 Euro cents.
In local economic news: ABS international trade price indexes for June and the Melbourne Institute bulletin of economic trends.
One company reporting today and that’s Woodside Petroleum Ltd which releases its June quarter report.
In business news: Shares in National Australia Bank (ASX:NAB) fell 1.82% to close at $23.76 on Thursday. There are reports this morning that 18,000 of the NAB's British customers have been affected by a mortgage calculation error. The Age Newspaper reports, thousands of customers of NAB's Clydesdale and Yorkshire banks have been left with a shortfall on their mortgages, and have all been asked to pay the correct monthly amount plus an additional monthly sum to meet that shortfall. In total around $32.8 million has been underpaid, with an average individual total underpayment running to £800 (pounds) per loan. The computer glitch was reportedly made when the Bank of England started cutting interest rates. The Australian bank is a relatively small player in Britain with just 1 per cent of the total market. In 2009 the National Australian Bank posted close to a $2.6 billion net profit.
Shares in Newcrest Mining Ltd (ASX:NCM) fell 1.17% to close at $32.92 on Thursday. The gold miner’s chief Ian Smith insists there are no fundamental flaws with the 50 per cent-owned Hidden Valley gold mine in Papua New Guinea despite the operation denting its June quarterly results. Yesterday Newcrest reported an increase in quarterly gold production – taking its full year result to 1.76 million ounces, which is 8 per cent higher than last year and within its March guidance. Hidden Valley was the only underperforming site. Production there has been hit by a high staff turnover, heavy rainfall and a thicker than expected layer of soft material. Smith has expressed regret about the underperformance but says improvement lies ahead with corrective measures in place. Newcrest Mining reported a net profit of $248 million for the year ending 30 June 2009.
To commodities, and the price of gold is up $3.90 to US$1,195.50 an ounce for the July contract on Comex. Silver is up 32 cents to US$18.12 and copper is up 7 cents at $3.16 pound.
The price of oil gained $2.74 to US$79.30 a barrel for September light crude in New York.
