The Australian share market is poised to open higher after encouraging US earnings and hopes for Europe helped to reverse earlier losses on Wall Street. Gains were boosted by reports that France and Germany have struck a deal to increase the effective lending capacity of the European Financial Stability Facility to €2 trillion.
US economic news
The Labor Department reported that producer prices increased more than expected last month. The Producer Price Index lifted 0.8 per cent in September, after a flat read the month before.
Figures
Wall Street closed higher on Tuesday: The Dow Jones Industrial Average added 180 points to 11,577, the S&P500 put on 25 points to close at 1,225 and the Nasdaq rose 43 points to close at 2,657.
European stocks closed mixed: London’s FTSE was down 26 points, Paris was down 25 and Frankfurt was up 18 points.
To Asian markets, stocks finished lower: Hong Kong’s Hang Seng was down 798 points, Tokyo Nikkei was down 138 and China’s Shanghai Composite was down 57.
Yesterday the Australian share market retreated from a six-week high yesterday, shedding more than 2 per cent: The S&P/ASX 200 Index dropped 89 points to close at 4,187. On the futures market the SPI is currently 55 points higher.
Currencies
The Australian Dollar at 8:40AM was buying $1.0262, 65.33 Pence Sterling, 78.85 Yen and 74.69 Euro cents.
Economic news
Due out today from Westpac Banking Corporation (ASX:WBC) and the Melbourne Institute, leading indexes of economic activity for October. From the Housing Industry Association and RP Data, the residential land report for June quarter.
Company news
Yesterday shares in Macquarie Group Limited (ASX:MQG) fell 2.58 per cent, closing at $24.20. Australia's largest investment bank and Indian lender, State Bank of India, are reportedly in talks to raise up to $1.5 billion for a second fund to invest in Indian infrastructure assets and companies. Sources have told Reuters that the first fund raised $1.2 billion before it closed earlier this year and a new fund could get off the ground as soon as the first quarter of 2012. Reuters says India is aiming to secure $1 trillion in infrastructure investment over the next five years. In the 2011 financial year Macquarie Group reported a $989 million net profit.
Shares in Mount Gibson Iron Limited (ASX:MGX) shed 8.9 per cent yesterday, closing at $1.49. The iron ore miner yesterday announced it had settled a dispute with Chinese steel company, Rizhao Steel. After Rizhao failed to pay damages and interest relating to its refusal to buy ore from Mt Gibson in the Global Financial Crisis, both companies have now struck a new deal that will see Rizhao buy waste material from Mt Gibson that would have otherwise been categorised as waste. Mt Gibson says total cash proceeds before crushing, ship-loading and royalty costs are expected to be around $US82 million. In the 2011 financial year Mount Gibson Iron reported a net profit of $240 million.
Ex-dividends
No companies are going ex-dividend today. Coming up tomorrow are Multiplex European Property Fund and Redflex Holdings.
Commodities
Gold is down $23.80 to $US1,652 an ounce for the December contract on Comex.
Silver is up $0.01 to $31.83.
Copper is down $0.02 at $3.36 a pound.
Oil is up $1.96 at $88.34 a barrel for November light crude in New York.
