Aussie shares are likely to rise this morning, following a positive offshore lead. US stocks advanced as investors await the results from Fed’s decision on economic stimulus and midterm elections on Wednesday.
On Tuesday, the Dow Jones Industrial Average closed 64 points higher at 11,189. The S&P 500 Index closed 9 points higher at 1,194 and the NASDAQ closed 29 points higher at 2,534.
European stocks were higher: London’s FTSE up 63 points, Paris is up 25 and Frankfurt up 49.
To Asian markets, stocks were mixed: Hong Kong’s Hang Seng was up 18 points, Tokyo’s Nikkei was up 5 points and China’s Shanghai Composite down 9.
The Australian share market finished marginally higher on Tuesday. The S&P/ASX 200 Index closed 3 points higher to 4,701 and on the futures market the SPI200 is up 13 points. Turning to currencies and the Aussie Dollar again yesterday briefly reached parity following the RBA’s interest rate decision, for only the second time since 1983. At 8:40AM this morning the Aussie is buying 99.94 US cents, 62.29 Pence Sterling, 80.61 Yen and 71.2 Euro cents.
In local economic news: Due out today the Australian Bureau of Statistics building approvals for September, and the KPMG analysis of Australian major banks’ results.
In company news: Shares in Commonwealth Bank of Australia Ltd (ASX:CBA) rose 1.78% on Tuesday to close at $50.19. Commonwealth come under fire, following its announcement yesterday that it will increase its mortgage rates by almost double the RBA’s rise. Federal Treasurer Wayne Swan has blasted the bank’s move as a cynical cash grab and warned it will face a very substantial backlash. Mr Swan also promised he would soon reveal a set of reforms to target improving competition. After cautioning its margins were being impacted by rising funding costs, Commonwealth will this Friday serve its home loan customers with a rate hike of 0.45 percentage points, which boosts its standard variable rate to 7.81 per cent. Speculation is mounting that Australia’s other major banks are set to follow suit. Commonwealth Bank posted a $5.68 billion profit in the 2010 financial year.
Shares in Westfield Group (ASX:WDC) closed 1.91% stronger at $12.81. Westfield is preparing for a restructure, with reports the group is gearing up to split its Australian and New Zealand retail operations. Speculation comes following news the group will launch a $3.5 billion capital raising to fulfil its plans for expansion. The group yesterday entered into a trading halt, pending a detailed announcement on the transaction. Westfield Group reported a turnaround result in the first half of 2010, earning $965.8 million.
To ex-dividends: While no companies are going ex-dividend today, coming up tomorrow ANZ Bank will be going ex-dividend with a 74 cent fully franked dividend.
To commodities: The price of gold is up US$6.30 to US$1356 an ounce for the December contract on Comex, silver is up US$0.28 to $24.84 and copper is up $0.05 at $3.84 a pound. The price of oil is steady at US$82.95 a barrel for December light crude in New York.
