The Australian share market looks to open higher this morning after Europe closed stronger and Wall Street finished flat. US stocks trimmed earlier gains in a low volume session, amid wariness surrounding Europe’s debt and ahead of the Federal Reserve’s interest rate decision.
Economic news
The International Monetary Fund has cut its forecasts for global growth and cautioned that the global economy has entered a "dangerous new phase". The IMF now expects global growth of 4 per cent in 2011-12, revised down from its June forecast of up to 4.5 per cent. The IMF has also cut its forecast for Australia’s economic growth to 1.8 per cent in 2011 and 3.3 per cent in 2012.
US economic news
Housing starts have fallen to the lowest level in three months. The Commerce Department reported that housing starts fell 5 per cent in August, coming in lower than had been expected at a seasonally adjusted annual rate of 571,000.
Figures
On Wall Street: The Dow Jones Industrial Average rose 8 points to close at 11,409, the S&P500 eased 2 points to close at 1,202 and the Nasdaq lost 23 points to close at 2,590.
European stocks closed higher on Tuesday: London’s FTSE was up 104 points, Paris was up 44 and Frankfurt was up 156 points.
Asian markets, stocks were mixed: Hong Kong’s Hang Seng up 97 points, Tokyo Nikkei was down 143 and China’s Shanghai Composite was up 10 points.
The Australian share market sank 1 per cent on Tuesday: The S&P/ASX 200 Index fell 41 points to close at 4,040. On the futures market the SPI is 33 points higher.
Currencies
The Australian Dollar at 7:45AM was buying $1.0266 US cents, 65.24 Pence Sterling, 78.56 Yen and 74.96 Euro cents.
Economic news
Due out today from Westpac Banking Corporation (ASX:WBC) and the Melbourne Institute, leading indexes of economic activity for September.
Company news
Yesterday shares in Rio Tinto Limited (ASX:RIO) fell 1.85 per cent, closing at $68.90. The chief of global miner Rio Tinto has insisted that demand for commodities is holding up despite softer mineral markets. CEO Tom Albanese has told investors that customers are more cautious but demand is not unwinding as some would fear. Mr Albanese also said unless financial markets substantially deteriorate the impact of current economic concerns on Rio’s business will be limited. Rio Tinto posted a net profit of $7.5 billion in the first six months of 2011.
On Tuesday shares in ANZ Banking Group (ASX:ANZ) dipped 0.46 per cent, closing at $19.32. ANZ will introduce new services to make it easier for Australian businesses trading in China. Most trade in China is currently with US dollars. According to the Australian Financial Review ANZ will enable its customers to hold Chinese currency in an Australian bank account and transact in China as well as its special form used for offshore trade. ANZ has the largest presence in the Asia Pacific region from the big four local banks and is targeting 30 per cent earnings growth in Asia, Europe and the Americas by 2017. ANZ generated a $2.7 billion net profit in the six months to 31 March this year.
Ex-dividends
The only company going ex-dividend today is Grange Resources with a $0.02 unfranked dividend. Coming up tomorrow is Credit Corp Group, Cadence Capital, Goodman Fielder and Mastermyne Group.
Commodities
Gold is up $30.20 to $US1,809 an ounce for the December contract on Comex.
Silver is up $0.97 cents to $40.14.
Copper is down $0.06 at $3.73 a pound.
Oil is up $1.19 at $86.89 a barrel for October light crude in New York.
