The Australian share market looks set to open higher, following a positive session on Wall St. US stocks lifted as investors reacted to strong earnings from Exxon Mobil and rising commodity prices, while still keeping an eye on the political unrest in Egypt. The price of oil advanced, with Brent oil rising above $US101 a barrel for the first time since 2008. US economic news: The Commerce Department reported personal income increased 0.4 per cent in December, coming in just under economists’ expectations. While personal spending increased 0.7 per cent in the same month, beating earlier forecasts.
On Monday, the Dow Jones Industrial Average, closed 68 points higher to 11,892, S&P500 firmed 10 points to close 1,286 and the NASDAQ added 13 points to close 2,700.
European stocks were mixed: London’s FTSE down 18 points, Paris up 3 and Frankfurt down 25.
To Asian markets, stocks were also mixed: Hong Kong’s Hang Seng was down 170 points, Tokyo was down 122 points and China’s Shanghai Composite rose 38 points.
The Australian share market finished lower on Monday. The S&P/ASX 200 Index dropped 21 points to close at 4,754 and on the futures market the SPI is up 12 points. Turning to currencies and the Australian Dollar at 8:45AM was buying 99.73 US cents, 62.27 Pence Sterling, 81.89 Yen and 72.85 Euro cents.
In economic news: The Reserve Bank of Australia today meets for its first board meeting of this year and interest rate decision, with economists widely expecting the rate to be kept unchanged at 4.75 per cent. The RBA is also due to release its index of commodity prices for January. Also due today, the Australian Industry Group/Pricewaterhouse performance of manufacturing index for January, the Australian Bureau of Statistics house price indexes: eight capital cities for the December quarter, and National Australia Bank’s monthly business survey for December. Company news: On Monday shares in Crane Group Ltd (ASX:CRG) rose 3.97 per cent to close at $9.96. Crane Group has recommended its shareholders accept Fletcher Building Group Ltd’s (ASX:FBU) sweetened takeover bid for the company. The endorsement comes after Fletcher boosted its offer from $9.35 per share to $10.07 per share, valuing Crane at over $800 million. The revised $10.07 bid includes $3.50 in cash, one Fletcher share and a fully franked 50 cent special dividend. For the year ended 30 June 2010, Crane reported a net profit of $31.9 million.
On Monday shares in Westpac Banking Corporation (ASX:WBC) added 0.35 per cent to close at $22.99. The Australian Financial Review says Westpac will this year need to secure around $40 billion in funding. The report comes following Westpac’s CEO Gail Kelly’s comments last week, telling the Senate banking inquiry that she predicts funding costs will peak in around 18 months. According to the AFR, Australia’s big four banks will need to find around $135 billion in wholesale funding this year because of their reliance on international financing. Westpac Banking posted a net profit of $6.4 billion in the year to 30 September 2010.
Ex-dividends: Katana Capital is going ex-dividend today with a $0.01 cent fully franked dividend. Coming up on Friday is Australian Foundation Investment Company with an $0.08 cent fully franked dividend.
To commodities: Gold is down $10.70 to $US1,333 an ounce for the February contract on Comex, silver is up $0.85 to $28.17 for March and copper is up $0.11 to $4.46 a pound. Oil is up $4.32 at $92.19 a barrel for March light crude in New York.
