The Australian share market is set to open weaker. Yesterday the retail index suffered its biggest fall in over a decade. Investors are particularly concerned about the state of the US economy and the possibility of a default, despite the Federal Reserve chairman trying to reassure investors that the central bank is ready to inject more money should the economy worsen.
US economic news
Jobless claims fell by 22,000, more than expected, to 405,000 last week. A level below 400,000 is typically associated with payroll growth.
Figures
On Thursday, the Dow Jones Industrial Average was down 54 points to close at 12,437, the S&P500 fell 9 points to close at 1,309 and the NASDAQ lost 34 points to close at 2,763.
European stocks were lower: London’s FTSE down 59 points, Paris fell 42, and Frankfurt lost 53 points.
To Asian markets and stocks were mixed: Hong Kong’s Hang Seng is up 13, Tokyo’s Nikkei fell 27 points and China’s Shanghai Composite gained 15.
The Australian share market closed lower on Thursday: The S&P/ASX 200 Index finished the day at 4,491. On the futures market the SPI is 9 points lower.
Currencies
The Australian Dollar at 7:45AM was buying $1.0725 US cents, 66.45 Pence Sterling, 84.89 Yen and 75.83 Euro cents.
Company news
Yesterday shares in Insurance Australia Group Ltd (ASX:IAG) ended the day flat at $3.29. IAG and Suncorp Group Ltd (ASX:SUN) expect to introduce full flood cover by early next year, according to Fairfax Media. The move will increase the number of households that will have automatic protection from a full range of natural disasters. According to the media report the move is partially aimed at pre-empting the likelihood of the government stepping in and forcing insurers to offer flood cover to all customers. For the half year ended December 31, 2010, Insurance Australia Group reported a net profit of $205 million.
On Thursday shares in Macarthur Coal Ltd (ASX:MCC) ended the day flat at $15.34. Bidders for Macarthur Coal have been forced to sweeten their takeover offer for the company according to a report by Fairfax Media. Yesterday Macarthur forced the bidders to agree to allow a final dividend of up to 16 cents a share to be paid to shareholders, as well as the takeover payment of $15.50 a share. In return bidders will gain access to confidential financial details about the coalminer to conduct “due diligence”. In the half year ended December 31, 2010, Macarthur Coal reported a net profit of $141 million.
Ex-dividends
There aren’t any companies going ex-divided today, but on Monday Euroz Ltd is coming up with a fully franked dividend of $0.15.
Commodities
Gold is up $3.80 to $US1,589 an ounce for the August contract on Comex, silver is up $0.54 to $38.69 for September and copper is down $0.02 at $4.38 a pound. Oil has fallen $2.36 to $95.69 a barrel for August light crude in New York.
