The Australian share market looks set to erase yesterday’s gains after Wall Street slipped for the sixth straight session. After a positive start on the back of a last-minute debt deal US stocks back-flipped into negative territory, weighed down by weak economic data and fears of a credit downgrade.
US economic news
The Institute for Supply Management has reported that the US manufacturing sector remained almost at a standstill last month. The manufacturing index fell more than had been expected to 50.9 in July, from 55.3 in June.
Figures
On Monday the Dow Jones Industrial Average closed 11 points lower at 12,132, S&P500 lost 5 points to close at 1,287 and the NASDAQ fell 12 points to close at 2,745.
European stocks started the week lower: London’s FTSE down 41 points, Paris down 83 and Frankfurt down 205.
To Asian markets, stocks closed higher: Hong Kong’s Hang Seng was up 223, Tokyo Nikkei was up 132 and China’s Shanghai Composite was up 2.
The Australian share market advanced more than 1.5 per cent on Monday: The S&P/ASX 200 Index jumped 73 points to close at 4,498. On the futures market the SPI is 73 points lower.
Currencies
The Australian Dollar at 7:40AM was buying $1.0978 US cents, 67.39 Pence Sterling, 84.81 Yen and 77 Euro cents.
Economic news
The Reserve Bank of Australia meets for its monthly board meeting and interest rate decision, due at 2.30pm this afternoon. Due out today from the Commonwealth Bank and Australian Chamber of Commerce and Industry is their business expectations survey for the June quarter, and, from the Australian Bureau of Statistics house price indexes and building approvals data, both for June.
Company news
On Monday shares in Rio Tinto Limited (ASX:RIO) rose 1.9 per cent to close at $81.52. Rio has announced that it has completed the divestment of its talc business to French mineral conglomerate, Imerys, for $US340 million. The news comes almost two years after the global miner first said it would sell the business to pay down its debt though disposing of assets. Since 2008, Rio says it has completed more than 20 divestments with proceeds in excess of $US11 billion. Rio Tinto reported a net profit of $14.9 billion in the 2010 financial year.
Shares in Valad Property Group (ASX:VPG) gained 1.42 per cent on Monday to close at $1.78. Valad investors have voted in favour of a proposal that will see Wall Street’s largest private equity house, Blackstone, buy the debt-laden real estate investment company. Pending approval from the New South Wales Supreme Court, Blackstone will take control of Valad and the company will cease trading on August 12. The scheme of arrangement has now received unanimous support from the Valad board, senior management, and 95 per cent of the register. In the first half of the 2011 financial year Valad Property Group booked a net loss of $50.7 million.
Ex-dividends
The only company going ex-dividend today is Djerriwarrh Investments with a $0.16 fully franked dividend. Coming up tomorrow is Ozgrowth and Westoz Investment Company.
Commodities
Gold is down $9.50 to $US1,621 an ounce for the December contract on Comex, silver is down 80 cents to $39.31 for September and copper is down 7 cents at $4.41 a pound. Oil is down $0.81 at $94.89 a barrel for September light crude in New York.
