Aussie shares are likely to open lower after Wall St recorded its biggest losses in two months. US stocks dropped following reports Bank of America may be forced to buy back billions of dollars in troubled mortgage bonds. Stocks also dragged on worse than expected company earnings and news that China increased its interest rate.
In US economic news: The US Census Bureau showed housing starts increased to an annual rate of 610,000 in September from the revised rate of 608,000 the month before. While building permits rose less than expected in September, increasing to the adjusted annual rate of 539,000.
On Tuesday, the Dow Jones Industrial Average closed 165 points down at 10,979. The S&P 500 Index is down 19 at 1,166 and the NASDAQ is down 44 at 2,437.
European stocks were lower: London’s FTSE down 39 points, Paris is down 27 and Frankfurt down 26.
Asian markets were higher: Hong Kong Hang Seng up 294, Tokyo’s Nikkei was up 41 and China up 47.
The Australian share market finished higher on Tuesday. The S&P/ASX 200 Index closed 4 points higher to 4,656 and on the futures market the SPI200 is down 36 points. Turning to currencies and the Aussie Dollar at 8:45AM was buying 96.94 US cents, 61.77 Pence Sterling, 79.14 Yen and 70.6 Euro cents.
In economic news: Expected out today Australian Bureau of Statistics international merchandise imports for September, Westpac-Melbourne Institute indexes of economic activity and Department of Education Employment and Workplace Relations jobs vacancy report.
In company news: Shares in BHP Billiton Ltd (ASX:BHP) closed 0.05% down at $41.16 on Tuesday. Global miner BHP has threatened to ditch the proposed mineral resources rent tax, following reports that Resources Minister Martin Ferguson is looking to go back on a key part of the deal. According to The Australian, BHP is allegedly furious with public and private statements by Mr Ferguson cautioning additional royalties that flow to state governments will not offset existing obligations under the proposed tax. BHP is believed to view this alledged amendment as a breach of the deal they signed in July. BHP Billiton booked a $15.26 billion profit in the 2010 financial year.
Shares in Prime Infrastructure Group Ltd (ASX:PIH) closed 6.3% up at $4.89 on Tuesday. Prime Infrastructure has announced that its suitor, Brookfield Infrastructure Partners, has boosted its takeover offer in an attempt to secure the remaining interest of the company. Canadian fund manager Brookfield has added an additional $42 million to the proposed offer to a total of $1.1 billion. The offer represents an extra 20 cents per security, valuing each Prime security at $5.21 per security. Prime Infrastructure Group recorded a net loss of $948.6 million in the in the twelve months to 30 June.
To ex-dividends: No companies are going ex-dividend today, but coming up tomorrow Trust Company will be going ex-dividend with a 17 cent fully franked dividend.
To commodities: and the price of gold is down US$36.10 to US $1336 an ounce for the December contract on Comex, silver is down US$0.63 to $23.78 and copper is down $0.10 at $3.76 a pound. The price of oil is down $3.59 to US$79.49 a barrel for November light crude in New York.
