Outlook: Aus shares set to retreat

Market Reports

After gaining more than 11 per cent over the past fortnight, the Australian share market looks set to retreat this morning. Overseas markets tumbled after comments from German officials failed to instil confidence that the upcoming EU summit will solve the region’s debt crisis. On Wall Street losses accelerated on mixed earnings and disappointing economic news.    

US economic news

The Empire State manufacturing index produced a read of negative 8.5 in October, from a read of negative 8.8 the month before. The read was the fifth straight month in negative territory and came in lower than expectations. 

Figures

Wall Street started the week lower, The Dow Jones Industrial Average dropped 247 points to 11,397. The S&P500 fell 24 points to close at 1,201. The Nasdaq lost 53 points to close at 2,615.

European stocks closed lower: London’s FTSE was down 30 points, Paris was down 52 and Frankfurt was down 108 points.

To Asian markets, stocks finished higher: Hong Kong’s Hang Seng was up 372 points, Tokyo Nikkei was up 132 and China’s Shanghai Composite was up 9.
 
Yesterday the Australian share market started the week 1.7 per cent stronger, reaching a six-week high: The S&P/ASX 200 Index gained 70 points to close at 4,275. On the futures market the SPI is 70 points lower.
 
Currencies

The Australian Dollar at 8:35AM was buying $1.0159, 64.57 Pence Sterling, 78.06 Yen and 74.01 Euro cents.

Economic news

Today the Reserve Bank of Australia releases the minutes of its October 4th board meeting.

Company news

Shares in Telstra Corporation Limited (ASX:TLS) rose 1.3 per cent on Monday, closing at $3.11. Telstra’s shareholders will today meet at the telco’s annual general meeting to cast their vote on an $11 billion national broadband network deal with the federal government. Shareholders are expected to give the deal the green light, with the final approval from the Australian Competition and Consumer Commission also expected to be granted before the end of the year. Speculation has heightened that if the deal passes Telstra could reveal a share buyback of up to $6 billion. In the full year to June 30, 2011 Telstra posted a net profit of $3.25 billion.

Shares in BWP Trust (ASX:BWP) gained 1.44 per cent yesterday, closing at $1.76. The Bunnings Warehouse Property Trust has inked a deal to buy a 50 per cent stake in Townsville's Domain Central homemaker centre for $61.5 million. The trust says it sees prime bulky goods centres, such as Domain Central, as being a good fit with its portfolio of Bunnings Warehouses. Bulky goods retailing providing retailers with a lower occupancy cost base and a larger floor space than traditional retail centres. In the full year to June 30, 2011 BWP Trust reported a net profit of $81.49 million.

Ex-dividends

The only company going ex-dividend today is New Hope Corporation with a $0.20 fully franked dividend.

Commodities

Gold is down $6.40 to $US1,676 an ounce for the December contract on Comex.
Silver is down $0.35 cents to $31.82.
Copper is down $0.03 at $3.38 a pound.
Oil is down $0.42 at $86.38 a barrel for November light crude in New York.


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