Biggest drop of the year so far: Aus shares to open lower

Market Reports

by Kathy Skantzos

The US markets retreated from gains seen so far this year, with the major indicies falling by market close, setting the ASX up for a weaker day of trade today.

The S&P 500 and Nasdaq closed lower for the first time in 2018, after a 6-day winning streak. The Dow fell 128 points at its session lows but closed 16 points lower by the session’s close. Utilities and real estate were the worst performing sectors, and shares in General Motors fell nearly 2.4 per cent. The weak performance on Wall Street comes after it was reported that Canada is sure Trump will pull out of the NAFTA agreement. Investors were also affected by a report that Beijing officials suggest the Chinese government lowers, or even stops, its buying of US sovereign debt.

In commodities, oil and gold have both picked up. There has been no change in iron ore.

US economic news

Mortgage applications increased 8.3 per cent last week following a 0.7 per cent gain in the previous week, the biggest rise in four months. Refinance applications jumped 11.4 per cent and applications to purchase a new home went up 5 per cent.

Import prices edged up 0.1 per cent in December 2017 compared to the previous month, missing market expectations of 0.5 per cent. Export prices edged down 0.1 per cent in December 2017 after a 0.5 per cent increase the previous month, the first monthly decrease in export prices since June, led by a fall in agricultural goods.

Local economic news due out today

The ABS will release retail sales figures for November, which increased half a per cent in October.

Figures

Wall Street closed in the red yesterday: The Dow Jones Industrial Average lost 0.1 per cent to close at 25,369 the S&P 500 lost 0.1 per cent to close at 2,748 and the NASDAQ lost 0.2 per cent to close at 7,154.

European markets closed mixed: London’s FTSE gained 0.2 per cent, while Paris lost 0.4 per cent and Frankfurt dropped 0.8 per cent.

Asian markets closed mixed: Tokyo’s Nikkei dropped 0.3 per cent, Hong Kong’s Hang Seng gained 0.2 per cent, and China’s Shanghai Composite lifted 0.2 per cent.

And back home, the Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 39 points down to finish at 6,097.

On the futures market the SPI is 7 points down.

Company news

Global litigation fund IMF Bentham (ASX:IMF) announced it has received $2.9 million in revenue following the settlement of US Case 36, an investment funded in the US by IMF’s wholly owned subsidiary, Bentham Capital. The settlement has generated a profit before tax of about $1.75 million and a return on investment of 1.9 times. Revenue from the investment will be part of the company’s first half 2018 financial year results. Shares in IMF Bentham (ASX:IMF) closed 2.6 per cent lower at $3.

Ex-dividends

Two companies are going ex-dividend today:

Bentley Capital (ASX:BEL) is paying 0.5 cents fully franked, and
Tegel Group (ASX:TGH) is paying 3.14 cents unfranked.

Currencies

One Australian Dollar at 8:30AM was buying 78.41 US cents, 58.06 Pence Sterling, 87.38 Yen and 65.63 Euro cents.

Commodities

Gold has gained $4.10 to $US1,318 an ounce.
Silver has lost $0.01 to $US17 an ounce.
Oil has gained $0.43 to $US63.30 a barrel.

Cryptocurrencies

Bitcoin has fallen 1.6 per cent in the last 24 hours to $14,586.
Ethereum gained 4.7 per cent to $1,315.
And Litecoin has fallen 1.5 per cent to $247.

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