Aussie shares may be in for a lower start, with Wall St closing mixed overnight. The Federal Reserve encouraged investors by restating its commitment to stimulate economic recovery. But without the upbeat outlook the market was hoping for, US stocks were unable to hold onto earlier gains.
In US economic news: The Commerce Department reported housing starts lifted 10.5 per cent compared with last year to 598,000, representing a four-month high and coming in well above economist’s expectations. Annual building permits also increased, up 1.8 per cent to 569,000.
On Tuesday, the Dow Jones Industrial Average closed 7 points higher at 10,761. The S&P 500 Index is down 3 at 1,140 and the NASDAQ is down 6 at 2,349.
European stocks were lower: London’s FTSE down 26 points, Paris is down 4 and Frankfurt down 19.
Asian markets were mixed: Hong Kong’s Hang Seng was 25 points higher on Tuesday, Tokyo’s Nikkei down 24 points and China’s Shanghai Composite was up 3.
The Australian share market finished lower on Tuesday. The S&P/ASX 200 Index closed 14 points lower to 4,618 and on the futures market the SPI200 is down 8 points. Turning to currencies and the Aussie Dollar at 7:50AM was buying 95.38 US cents, 61.11 Pence Sterling, 81.24 Yen and 71.97 Euro cents.
In local economic news: Due out today the Westpac/Melbourne Institute indexes of economic activity.
In business news: Shares in Telstra Corporation Ltd (ASX:TLS) closed 1.81% lower at $2.72 on Tuesday. Australia’s largest telecommunications company, Telstra has reaffirmed its lower earnings forecast for the year ahead, and says 2011 will be a transitional year for the company. In fiscal 2011 Telstra expects a high single digit percentage drop in EBITDA, with free cashflow of between $4.5 billion to $5 billion for the year. The Telco anticipates a rise in its customer base but says revenue will be flattish because of its necessary investments. For the year to 30 June Telstra posted a $3.94 billion profit, dropping from the $4.08 billion profit reported the year before.
Shares in Macquarie Group Ltd (ASX:MQG) closed 0.41% lower at $36.34 on Tuesday. Macquarie Bank has not complied with the Sydney Futures Exchange operating rules concerning disclosure, according to the Australian Associated Press. AAP reports that Macquarie has been fined $50,000 for having broken six rules relating to a trade of June 2009 10-year Commonwealth Treasury Bond Futures Contracts. Macquarie Group reported a profit of over $1 billion for the year ending 30 March 2010.
To ex-dividends: Three companies are going ex-dividend today, Aevum with a 3 cent unfranked dividend, Mastermyne Group with a 1.2 cent fully franked dividend and Tox Free Solutions with a 2 cent fully franked dividend.
To commodities: The price of gold is down $6.60 to US$1272 an ounce for the September contract on Comex, silver is down $0.16 to $20.62 and copper is down $0.02 at $3.47 a pound. The price of oil is down $1.34 to US$73.52 a barrel for October light crude in New York.
