The Australian share market is set to open slightly stronger despite yesterday’s nine month closing low. Local stocks are likely to follow flat to moderately positive US leads on the back of some better than expected economic news.
US economic news
Permits for housing construction climbed 8.7% in May, the highest monthly rate since December. And housing starts, the number of new homes being built, rose 3.5% in May.
And jobless claims fell by 16,000 to 414,000 last week. Anything above 400,000 is considered too high.
Figures
On Thursday, The Dow Jones Industrial Average was up 64 points to close at 11,962, the S&P500 rose 2 points to close at 1,268 and the NASDAQ fell 8 points to close at 2,624.
European stocks were weaker: London’s FTSE down 44 points, Paris fell 15 and Frankfurt also dropped 5 points.
To Asian markets and stocks were weaker: Hong Kong’s Hang Seng was down 391, Tokyo’s Nikkei fell 163 points and China’s Shanghai Composite was down 41.
The Australian share market fell on Thursday: The S&P/ASX 200 Index shed 88 points to close at 4,479. On the futures market the SPI is 9 points higher.
Currencies
The Australian Dollar at 7:40AM was buying $1.0556 US cents, 65.32 Pence Sterling, 85.1 Yen and 74.31 Euro cents.
Company news
Yesterday shares in National Australia Bank Ltd (ASX:NAB) fell 1.58 per cent to close at $24.26. The bank’s wealth management arm MLC is being sued for damages by a client after their money was invested in European property funds. The couple claim they told the adviser they did not want their capital at risk. They allege NAB was influenced by benefits it stood to gain in fees and commission. The case is being heard in the Supreme Court of Victoria. NAB is yet to file a defence. For the six months to March this year, NAB posted a profit of $2.4 billion.
On Thursday shares in Gunns Ltd (ASX:GNS) ended the day 7.27 per cent lower at $0.255. The conflict over logging old growth forests in Tasmania could soon be resolved according to a report by the Australian Financial Review. The paper says it has learned that all the major points have been agreed upon among the forestry stakeholders. If so, it would pave the way for an end to almost all old-growth logging in the state, allowing Gunns to build its $2.3 billion pulp mill and ending the thirty year deadlock. It’s unclear if compensation has been set aside for Gunns. For the half year ended December 31, 2010 Gunns booked a net loss of $4.6 million.
Ex-dividends
There are three companies going ex-dividend today. They are PaperlinX SPS Trust with an unfranked dividend of $3.73, joined by Thorn Group Ltd with a fully franked dividend of $0.05, and Trojan Equity Ltd with an unfranked dividend of $0.12. Coming up on Monday we have Metcash Ltd.
Commodities
Gold is up $3.70 to $US1,529 an ounce for the August contract on Comex, silver is up $0.15 to $35.56 for July and copper is flat at $4.12 a pound. Oil is up $0.14 at $94.95 a barrel for July light crude in New York.
