The Australian market is set to open flat with positive leads from the US, but negative leads in Asia and Europe. A rebound in commodity prices overnight is expected to keep stocks humming nicely along today, with a repeat of yesterday’s fall unlikely.
US economic news, new claims for US unemployment benefits fell to 434,000 in the week ending May 7.
In economic news out of China, the People’s Bank of China has ordered banks to increase reserves by 0.5 per cent.
To the figures: On Thursday, the Dow Jones Industrial Average was up 66 points to close at 12,696, the S&P500 up 7 points to close at 1,349 and the NASDAQ up 18 points to close at 2,863.
European stocks closed lower, London’s FTSE was down 31 points, Paris down 35 and Frankfurt was down 51 points.
To Asian markets and stocks were also lower: Hong Kong’s Hang Seng was down 218, Tokyo’s Nikkei was down 148 and China’s Shanghai Composite was down 39.
The Australian share market finished lower on Thursday. The S&P/ASX 200 Index fell 84 points to close at 4,696. While on the futures market the SPI is currently up 26 points.
Turning to currencies and the Australian Dollar at 7:45AM was buying US$1.0672, 65.53 Pence Sterling, 86.44 Yen and 74.95 Euro cents.
Taking a look at Australian economic news, Opposition Leader Tony Abbott has given his budget reply, promising to reduce debt and ease cost of living pressures.
In company news, on Thursday shares in Qantas Airways Ltd (ASX:QAN) fell 0.93 per cent to close at $2.12. Qantas is planning to launch an airline based in Singapore according to a report in the Australian Financial Review. The move is in an effort to cut costs and launch into the Asian market but will also circumvent airline unions. Confrontation with unions is expected. For the half year ended on 31 December 2010 Qantas reported a net profit of $239 million.
Shares in Fairfax Media Ltd (ASX:FXJ) rose 0.46 per cent to close at $1.10 yesterday. There aren’t any strikes planned at Fairfax’s flagship Melbourne and Sydney newspapers in response to the shedding of 82 jobs. The unions held a meeting directly after the announcement that jobs would be cut and sub-editing work was to be outsourced. The committees said they have not planned industrial action now or in the future. Fairfax Media reported a profit of $173 million in the half year ended December 31, 2010.
Ex-dividends: Two companies are going ex-dividend today. They are Incitec Pivot Ltd with an unfranked dividend of $0.03 and RHG Ltd with a $0.79 fully franked dividend. Coming up on Monday we have the Telecom Corporation of New Zealand and Westpac.
And to commodities: Gold is up $5.40 to $US1,506 an ounce for the June contract on Comex, silver is down $0.72 to $34.80 for July and copper is up $0.06 at $3.97 a pound. Oil is up $0.76 at $98.97 a barrel for June light crude in New York.
