The Australian share market appears to be bracing for a fall this morning, having received negative offshore leads. Fears of a US debt default continue to weigh on global markets as the nation’s debt ceiling negotiations remain stalled. Selling on Wall Street accelerated after weak earnings reports and economic data.
US economic news
The Commerce Department revealed a slowdown in durable goods spending. Defying expectations of a rise, durable goods orders were down 2.1 per cent in June after a rise of 1.9 per cent the month before.
Figures
On Wednesday Wall Street suffered its worst day in two months: The Dow Jones Industrial Average dropped 199 points to close at 12,303, the S&P500 fell 27 points to 1,305 and the NASDAQ retreated 75 points to close at 2,765.
European stocks fell: London’s FTSE closed 73 points down, Paris was down 54 and Frankfurt was down 97 points.
To Asian markets, stocks closed mixed: Hong Kong’s Hang Seng was down 30, Tokyo Nikkei was down 51 and China’s Shanghai Composite was up 20 points.
The Australian share market sunk 0.8 per cent on Wednesday: The S&P/ASX200 Index lost 36 points to close at 4,537. On the futures market the SPI is down 64 points.
Currencies
The Australian Dollar at 7:30AM was buying $1.1032 US cents, 67.55 Pence Sterling, 85.97 Yen and 76.78 Euro cents.
Company news
On Wednesday shares in Westpac Banking Corporation (ASX:WBC) fell 1.59 per cent, closing at $21.02. Despite yesterday’s higher than expected inflation figures and increasing speculation Australia’s central bank will move to hike rates sooner than later, Westpac has maintained its forecast for a rate cut. Earlier this month Westpac became the first of Australia’s banks to predict the Reserve Bank of Australia will cut rates, starting with 25 basis points by year end. The bank says weaker consumer sentiment and European debt concerns are why it’s confident rates are headed down. In the first half of its 2011 financial year, Westpac generated a net profit of $3.9 billion.
Shares in Perpetual Limited (ASX:PPT) slipped 0.84 per cent yesterday, closing at $24.74. Perpetual’s monthly update has disappointed, revealing a fall of around $500 million in funds under management for the first six months of this year. The wealth manager has recorded $27.2 billion under management for the half year. $200 million has been paid through year-end distributions, but a net outflow of $204 million in June adds to net outflows of $116 million the month before. In the first half of its 2011 financial year Perpetual posted a net profit of $35 million.
Ex-dividends
No companies are going ex-dividend today. Coming up tomorrow are Alcoa and Cellnet Group.
Commodities
Gold is down $1.70 to $US1,615 an ounce for the August contract on Comex, silver is down $0.13 to $40.57 for September and copper is down $0.03 at $4.45 a pound. Oil is down $2.19 at $97.40 a barrel for September light crude in New York.
