The Australian share market is likely to open higher this morning following a strong finish on Wall St overnight.
US stocks rallied on Wednesday as investors welcomed better than expected manufacturing data both locally and out of China.
Taking a look at economic data out of the US: The Institute for Supply Management’s index of manufacturing activity rose to a read of 56.3 in August. Economists had expected the index to fall. A read above 50 indicates expansion in the sector.
Payroll processing firm ADP reported that employers slashed 10,000 jobs in August. Economists expected private sector employers to add 13,000 jobs.
In another report, Challenger, Gray and Christmas report that planned job cuts fell to a 10 year low in August.
The reports come ahead of key labor data out on Friday with CNN Money saying the unemployment rate is expected to rise to 9.6% in August from 9.5% in July.
On Wednesday, the Dow Jones Industrial Average closed 255 points higher at 10,269. The S&P 500 Index rose 31 to close at 1,080 and the NASDAQ closed 63 points stronger at 2,177.
European stocks were also higher; London’s FTSE climbed 141, Paris gained 133 and Frankfurt added 159.
Asian markets were mixed on Wednesday: Hong Kong’s Hang Seng up 87 points, Tokyo’s Nikkei added 103 points and China’s Shanghai Composite closed 16 points lower.
The Australian share market finished stronger on Wednesday. The S&P/ASX 200 Index closed 92 points higher to 4,496 and on the futures market the SPI200 is up 74 points. Turning to currencies and the Aussie Dollar at 7:50AM was buying 91.1 US cents, 58.96 Pence Sterling, 76.94 Yen and 71.17 Euro cents.
In local economic news: ABS international trade in goods and services data for July is due out today.
In business news: Shares in Seven Group Holdings Ltd (ASX:SVW) rose 3.04% to $6.45 yesterday. The company has dismissed suggestions that it may be looking to increase its stake in Prime Media Group. The Australian Financial Review online says, Seven Group Holdings, which owns 11.5 per cent of Prime, is prevented from raising its interest in the company due to the ‘audience reach’ rule which stops a company owning TV stations that reach over 75 per cent of the population. However this may change with Communications Minister Stephen Conroy saying if Julia Gillard is re-elected this rule will be abolished. When asked by Afr.com to comment on the speculation, CEO Peter Gammell said the company could not see a particular reason to buy Prime. Seven Group Holdings earned $12.49 million in fiscal 2009.
Shares in North Queensland Metals Ltd (ASX:NQM) rose 1.56% to $0.325 on Wednesday. The company says it has received an unsolicited approach from a third party that could lead to a takeover offer which rivals offers currently on the table from Conquest Mining and Heemskirk Consolidated. The company says the third party has indicated that any offer made will be at a higher price and capable of being considered a superior proposal to those made by Heemskirk and Conquest.
To ex-dividends: Among those going ex-dividend today is Amcor with a 17 cent unfranked dividend, Bell Financial Group with a 2.5 cent fully franked dividend, and News Corp with a 7.5 cent unfranked dividend.
Turning to commodities: The price of gold is down $2 to US$1246 for the September contract on Comex, silver fell $0.04 to $19.36, copper is up $0.11 to $3.47, and the price of oil is up $1.99 to US$73.91 a barrel for October light crude in New York.