The Australian share market looks to be in for a lacklustre start to the day. The futures are suggesting a flat open, following a mixed lead from overseas markets. US stocks closed mixed as investors digested inflation and housing data, while concerns over Ireland’s debt were met with news that the country is preparing to enter financial crisis talks with European monetary bodies ahead of speculation a bailout is being considered.
In US economic news: A key measure of inflation, the US Bureau of Labor Statistics’ Consumer Price Index, rose just 0.2 per cent in October, representing a steady read for underlying inflation over the past three months. The Commerce Department showed housing starts dropped 11.7 per cent in October, more than expected at an annual rate of 519,000 units. While building permits also delivered a read lower than expected, up 0.5 per cent to an annual rate of 550,000 units in the month.
On Wednesday, the Dow Jones Industrial Average closed 16 points lower at 11,008. The S&P500 Index closed flat at 1,179 and the NASDAQ closed 6 points higher at 2,476. European stocks were higher: London’s FTSE up 11 points, Paris is up 30 and Frankfurt up 37.
To Asian markets, stocks were mixed: Hong Kong’s Hang Seng was down 479 points, Tokyo’s Nikkei was up 15 points and China’s Shanghai Composite down 56.
The Australian share market finished lower on Wednesday. The S&P/ASX 200 Index closed 76 lower at 4,624 and on the futures market the SPI200 is down 1 point. Turning to currencies and the Aussie Dollar at 8:45AM was buying 97.94 US cents, 61.6 Pence Sterling, 81.54 Yen and 72.44 Euro cents.
In local economic news: Due out today The Australian Bureau of Statistics international merchandise imports for October and also, the average weekly earnings for August.
Company news: Shares in Metcash Ltd (ASX:MTS) closed 0.22% weaker at $4.50 on Wednesday. Australia’s competition watchdog has shut down Metcash’s $215 million proposed takeover of Franklins supermarkets. The Australian Competition and Consumer Commission says the planned tie-up would result in a substantial reduction in competition, through the removal of Metcash’s closest and only genuine competitor for wholesale supply of packaged groceries in New South Wales, effectively giving Metcash a monopoly on grocery wholesaling to independent supermarkets in the state. However, the ACCC has rejected that Franklins will now be an easy target for major supermarket chains such as Coles and Woolworths Ltd (ASX:WOW), adding that any proposed acquisition will be subject to the regulator’s scrutiny. Metcash reported a net profit of $230.3 million in the year to 30 April 2010.
Shares in Cabcharge Australia Ltd (ASX:CAB) fell 2.4% yesterday to close at $5.70. Cabcharge has agreed to pay a $15 million penalty in relation to breaches of the Trade Practises Act. Fairfax reports the settlement between the taxi services company and the ACCC was approved by the Federal Court yesterday, adding that Justice Ray Finkelstein said the fee to be incurred by Cabcharge will have a significant specific and general deterrence effect. The paper says Cabcharge will pay the largest total penalty imposed for a breach of section 46 of the Trade Practices Act, which includes $14 million in penalties, in addition to $1 million in fees towards the ACCC’s legal expenses. Cabcharge says it is pleased the case is over and it is committed to ensuring the company complies with its obligations under the Trade Practices Act as well as applying a program to prevent future anti-competitive conduct. Cabcharge booked a net profit of $57.6 million in the year to 30 June 2010.
To ex-dividends: The only company going ex-dividend is Incitec Pivot with a 6 cent unfranked dividend. Coming up next week are Count Financial, Novarise and Redflex Holdings. To commodities: The price of gold is down $US1.50 to $US1336 an ounce for the December contract on Comex, silver is up $US0.28 to $25.51 and copper is steady at $3.73 a pound. The price of oil is down $1.90 to $US80.44 a barrel for December light crude in New York.
