The Australian share market looks likely for a weaker start to the week. US stocks closed lower on Friday as oil and gold prices spiked and ahead of a looming government deadline for an agreement on budget cuts. The Australian dollar continues to soar, again hitting a record level this morning.
US economic news: In a dramatic eleventh-hour deal at the end of last week Democrats and Republicans agreed on some $US38.5 billion of extra spending cuts, effectively preventing a US Government shutdown.
To the figures: On Friday the Dow Jones Industrial Average closed 29 points lower at 12,380, S&P500 eased 5 points to close at 1,328 and the NASDAQ fell 16 points to close at 2,780.
European stocks ended the week higher: London’s FTSE up 48 points, Paris up 34 and Frankfurt up 38.
Asian markets, stocks were also higher: Hong Kong’s Hang Seng was up 114, Tokyo Nikkei was up 177 and China’s Shanghai Composite was up 22 points.
The Australian share market finished last week stronger: The S&P/ASX 200 Index rose 33 points to close at 4,941. On the futures market the SPI is currently 11 points lower.
Turning to currencies and the Australian Dollar at 7:35AM was buying $1.0563 US cents, 64.5 Pence Sterling, 89.67 Yen and 73.04 Euro cents.
Economic news: Due out today is the Australian Bureau of Statistics lending finance data for February.
Company news: On Friday shares in BHP Billiton Ltd (ASX:BHP) closed 0.16 per cent higher at $47.76. The local head of Shell, the holder of a 24.3 per cent stake in Woodside Petroleum Ltd (ASX:WPL), has spoken out after a British newspaper reported that BHP is in detailed talks to purchase the stake for $46.7 billion. Rumours have been mounting for months that BHP is preparing to move in on Woodside, while the price of Woodside’s shares have steadily climbed to $47.26 at the end of last week. However moving to subdue the speculation, Shell Australia chair Ann Pickard said last night that, "there are no commercial discussions," and that she isn’t in a hurry to ink a deal. BHP reported a net profit of $10.5 billion for the half year ended 31 December 2010.
Shares in Leighton Holdings Ltd (ASX:LEI) last traded at $28.94 before being placed into a trading halt last Thursday. Leighton Holdings has been tipped to today announce a recapitalisation plan that includes its German parent company Hochtief According to the Australian, Leighton and Hochief have been in talks and are expected to meet again this morning before making a pre-market announcement which could include a capital raising of up to $800 million. Leighton has already twice downgraded its guidance this year and it last forecast that its full year result would fall by more than 20 per cent. In the six months to 31 December 2010, Leighton Holdings generated a net profit of $218 million.
Ex-dividends: And there are eight companies are going ex-dividend today. Among them we have Harvey Norman Holdings with a $0.06 fully franked dividend, Katana Capital with a $0.01 fully franked dividend, New Hope Corporation with a $0.05 fully franked dividend, Premier Investments with an $0.18 fully franked dividend and ThinkSmart with a $0.04 dividend, 45% franked. Coming up tomorrow is Kresta Holdings.
Commodities: Gold is up $15.20 to $US1,474 an ounce for the June contract on Comex, silver is up $1.06 to $40.61 for May and copper is up $0.09 at $4.50 a pound. Oil is up $4.00 at $112.79 a barrel for May light crude in New York.
