The Australian share market is expected to open lower today following weak overseas leads. Wall St fell for a second day, London and Tokyo ended the day lower spooked by strong Chinese growth data and the possibility of further monetary tightening. Commodities are expected to drag the local market lower, if China slows fast, and its desire for commodities is reduced those stocks will feel the full impact.
US economic news: The National Association of Realtors showed existing home sales jumped 12% in December, more than anticipated, despite bad weather. The housing sector continues to struggle to recover from a severe slump. The Labor Department reported US initial jobless claims posted their biggest weekly decline in nearly a year, with 37,000 less claims made.
On Wednesday, the Dow Jones Industrial Average, dropped 2 points to close at 11,823. S&P500 lost 2 points to close 1,280 and the NASDAQ slid 21 points to close 2,704. European stocks were lower: London’s FTSE down 109 points, Paris down 12 and Frankfurt down 58.
To Asian markets, stocks were lower: Hong Kong’s Hang Seng was down 416 points, Tokyo fell 120 points and China’s Shanghai Composite was down 80 points.
The Australian share market closed weaker on Thursday. The S&P/ASX 200 Index dropped 51 points to close at 4,784 and on the futures market the SPI is down 12 points. Turning to currencies and the Aussie Dollar at 8:30AM was buying 98.83 US cents, 62.14 Pence Sterling, 82.05 Yen and 73.35 Euro cents.
Company news: On Thursday shares in Westpac Banking Corporation (ASX:WBC) weakened 0.97 per cent to close at $22.39. Westpac chief Gail Kelly will front a Senate inquiry today and is widely tipped to argue that banking competition is strong in Australia. She will be the fourth of the major bank bosses to give evidence. In its written submission, Westpac has argued to improve the tax effectiveness of savings. The bank also says that competition is vibrant. The Australian Securities and Investment Commission will also give evidence. In the year to 30 September 2010, Westpac Banking lifted its net profit to $6.4 billion.
Yesterday shares in Foster's Group Limited (ASX:FGL) eased 0.18 per cent to close at $5.55. Merrill Lynch has slashed the company’s net profit forecast by 14 per cent to $710 million for the 2011 financial year. Wet weather and the strong Australia dollar were sighted as the reasons for the cut. Foster’s has taken $3.53 billion in writedowns on its wine assets over the past decade. Shareholders remain tense as they wait for more details on the company’s plans to split its beer and wine businesses into two listed entities. Foster's reported a loss of $463.4 million in the year to 30 June 2010.
To commodities: Gold is down $23.70 to $US1,346 an ounce for the February contract on Comex, silver is down $1.33 to $27.47 for March and copper is down $0.10 to $4.27 a pound. Oil is down $2.00 at $88.86 a barrel for February light crude in New York.
