The Australian sharemarket is set to open higher following strong offshore leads. European and US markets gained overnight, reacting to a rate cut in Europe and Greece indicating it will scrap plans for a referendum.
US economic news
First time jobless claims fell to a five week low, totalling 397,000 last week.
European economic news
The European Central Bank has cut interest rates by a quarter of a percentage point to 1.25 per cent.
And Greece has backed away from a controversial referendum. Prime Minister George Papandreou says Greece must accept the EU bailout or leave the eurozone.
The figures
On Thursday The Dow Jones Industrial Average gained 208 points to 12,044, the S&P500 added 23 points to close at 1,261 and the Nasdaq rose 58 points to close at 2,698.
European stocks closed higher: London’s FTSE was up 62 points, Paris gained 85 and Frankfurt rose 168 points.
To Asian markets, stocks finished mixed: Hong Kong’s Hang Seng was down 491 points, Tokyo’s Nikkei was closed and China’s Shanghai Composite rose 4.
The Australian share market closed lower on Thursday. The S&P/ASX 200 Index fell 13 points to close at 4,172. On the futures market the SPI is currently 88 points higher.
Currencies
The Australian Dollar at 8:30AM is buying $US1.0407 cents, 64.92 Pence Sterling, 81.29 Yen and 75.35 Euro cents.
Australian economic news
The Reserve Bank of Australia will release its statement on monetary policy.
Company news
Woolworths Limited (ASX:WOW) shares firmed 2.22 per cent yesterday, closing at $23.91. Woolworths may not achieve its 10 per cent earnings growth, that’s according to a report by the Australian Financial Review. Brokers have warned the long term forecast is aspirational and is unlikely to be achieved if food price inflation remains low and the grocery price war heats up. Brokers downgraded their earnings forecasts for 2013 after the chief executive revealed difficult conditions would limit profit growth to between 2 and 6 per cent this year and continue into the next. In the 2011 financial year Woolworths generated a net profit $2.1 billion.
Westpac Banking Corporation (ASX:WBC) shares fell 0.05 per cent yesterday, closing at $21.51. The Westpac chief says the bank’s justified in making structural changes given a period of low growth ahead. The changes will of course include job cuts and moving some functions offshore according to the Australian Financial Review. Gail Kelly says the bank needs to also focus more on online and mobile banking services. Westpac reported a full year net profit to September 30 of $7 billion.
Ex-dividends
There aren’t any companies going ex-dividend today, but coming up on Monday we have Macquarie Group and Westpac.
Commodities
Gold is up $35.50 to $US1,765 an ounce for the December contract on Comex. Silver is up $0.56 to $34.50. Copper has risen $0.01 at $3.59 a pound. Oil has gained $1.56 to $94.07 a barrel for November light crude in New York.
