The SPI is pointing to a positive start for the Australian share market, following strong offshore leads. Wall St advanced with a $20 billion merger in the pharmaceutical sector and healthy earnings reports. Sentiment also lifted after the US Federal Reserve’s issued an optimistic outlook for the country’s economy.
US economic news: Minutes from the Federal Reserve’s January meeting revealed an improved economic forecast. The central bank lifted its estimate for US GDP growth to rise between 3.4 per cent to 3.9 per cent this year. Also out, The Commerce Department showed housing starts rose more than expected in January, up 14 per cent to an annual rate of 596,000. However a measure of activity, building permits, came in under expectations. In the same month permits dropped 10 per cent to an annual rate of 562,000.
On Wednesday, the Dow Jones Industrial Average, strengthened 62 points to close at 12,288, S&P500 firmed 8 points to close 1,336 and the NASDAQ added 21 points to close 2,826.
European stocks were higher: London’s FTSE up 48 points, Paris up 41 and Frankfurt up 14.
To Asian markets, stocks were also higher: Hong Kong’s Hang Seng was up 257 points, Tokyo was up 62 points and China’s Shanghai Composite was up 25.
The Australian share market dipped into the red on Wednesday. The S&P/ASX 200 Index close flat at 4,930 and on the futures market the SPI is up 11 points.
Turning to currencies and the Australian Dollar at 8:40AM was buying $US1.0033 cents, 62.36 Pence Sterling, 84 Yen and 73.97 Euro cents.
Economic news: The Reserve Bank of Australia’s assistant governor Philip Lowe, and Westpac CEO Gail Kelly are due to today address the Committee for the Economic Development of Australia.
Company news: On Wednesday shares in Qantas Airways Ltd (ASX:QAN) closed steady at $2.39. Analysts have tipped Qantas could post as much as a fourfold profit increase, and even re-instate dividends, when Australia’s largest airline today reveals its first half results. The expectations come on the back of an improvement in the global aviation industry, despite rising fuel costs. Just last week Qantas said it will hike ticket prices for domestic, trans-Tasman and regional services from the end of this month because of higher fuel prices. In the 2010 financial year, Qantas reported a net profit of $116 million.
Yesterday shares in Wesfarmers Ltd (ASX:WES) firmed 0.53 per cent to close at $34.34. Wesfarmers owned Coles has scored complete ownership of FlyBuys, Australia’s oldest and largest shopping rewards program, through buying out National Australia Bank Ltd’s (ASX:NAB) stake, according to the Australian Financial Review. The paper reports that Coles will now gain full control of the 10 million cardholder-scheme, enabling the supermarket chain to market the scheme and access all the customer data. The news comes just a few weeks after Coles posted a 6.7 per cent rise in its total quarterly sales to $8.8 billion. Wesfarmers is today due to release its first half results. In the 2010 financial year, Wesfarmers booked a net profit of $1.6 billion.
Ex-dividends: Three companies are going ex-dividend today and they are Ansell with a $0.14 cent unfranked dividend, GUD Holdings with a $0.29 cent fully franked dividend and Oz Minerals with a $0.04 cent unfranked dividend. Coming up tomorrow is Boral with an $0.08 cent fully franked dividend.
To commodities: Gold is up $1.00 to $US1,375 an ounce for the April contract on Comex, silver is down $0.07 to $30.63 for March and copper is down $0.07 at $4.47 a pound. Oil is up $0.67 at $84.99 a barrel for March light crude in New York.
