The Australian market looks set to recover some of this week’s steep losses after global markets rose on hopes for tackling Europe’s sovereign debt crisis. Wall Street finished higher for a third straight day, lifting after the leaders of France and Germany affirmed their confidence that Greece will remain as part of the eurozone.
Asian economic news
The Asian Development Bank yesterday cut its outlook for growth in Asia, now expected to be 7.5 per cent over the next year, down from earlier forecasts of up to 7.8 growth.
US economic news
A measure of wholesale inflation was unchanged last month. The US Bureau of Labor Statistics showed the Producer Price Index added 0.1 per cent in August, in line with expectations, after an increase of 0.4 per cent the month before.
Retail sales were also unchanged in August, defying expectations for a rise. The Commerce Department reported that retail sales were flat last month, after an increase of 0.3 per cent the month before.
Figures
On Wednesday, the Dow Jones Industrial Average advanced 141 points to close at 11,247, the S&P500 gained 16 points to close at 1,189 and the Nasdaq rose 40 points to close at 2,573.
European stocks closed higher: London’s FTSE was up 53 points, Paris was up 54 and Frankfurt was up 174.
To Asian markets, stocks were mixed: Hong Kong’s Hang Seng up 15, Tokyo Nikkei was down 98 points and China’s Shanghai Composite was up 14 points.
The Australian share market reversed early gains yesterday to shed 1.6 per cent and fall to a five-week low: The S&P/ASX 200 Index dropped 67 points to close at 4,006. On the futures market the SPI is 72 points stronger.
Currencies
The Australian Dollar at 8:00AM was buying $US1.0271 cents, 65.15 Pence Sterling, 78.8 Yen and 74.75 Euro cents.
Economic news
Due out today from the Australian Bureau of Statistics, new motor vehicle sales for August and the Reserve Bank of Australia’s quarterly bulletin.
Company news
Yesterday shares in Telstra Corporation Limited (ASX:TLS) closed 0.67 per cent higher at $3.02. Two leading economics professors have called on Australia’s competition regulator to take action against Telstra’s planned $11 billion national broadband network (NBN) deal. The economists claim that key aspects of the NBN deal are massively anti-competitive and threaten to push Australia backwards. Telstra’s NBN deal is yet to gain regulatory and shareholder approval. Shareholders will get their chance to vote at the telco’s annual general meeting on October 18, 2011. In the 2011 financial year Telstra posted net profit of $3.25 billion.
Shares in ANZ Banking Group (ASX:ANZ) closed 1.55 per cent lower on Wednesday, finishing at $19.02. The head of ANZ believes global market volatility stemming from Europe and the US could present opportunities for the bank. CEO Mike Smith says banks in both regions will need to sell assets to improve their capital base that ANZ would look to acquire to expand its presence in Asia. ANZ is currently targeting to derive up to a third of its income from Asia by 2017. Mr Smith says the bank emerged from the Global Financial Crisis with a stronger balance sheet than before, and that he would like to do the same thing again. ANZ posted a net profit of $2.7 billion for the half year to 31 March 2011.
Ex-dividends
Six companies are going ex-dividend today: Brambles, Carsales.com, Dicker Data, REA Group, Skilled Group, Transfield Services. Among those coming up tomorrow: AP Eagers.
Commodities
Gold is down $3.60 to $US1,826 an ounce for the December contract on Comex.
Silver is down $0.66 cents to $40.53.
Copper is down 7 cents at $3.90 a pound.
Oil is down $1.30 at $88.91 a barrel for October light crude in New York.
