The Australian share market looks to tumble this morning after debt fears on both sides of the Atlantic sent global stocks south. Falls accelerated on Wall Street as doubts rose over US deficit-cutting talks. In Europe ratings agency Moody's warned the region’s debt crisis is threatening France’s triple A credit rating. Commodity prices have retreated and the Australian Dollar has fallen to a six week low.
US economic news
More existing homes in the US were sold last month. The National Association of Realtors reported sales of existing homes increased 1.4 per cent in October. The rise beat expectations and also came in higher than the month before. In October an existing home in the US fetched an average price of $US162,500, down 4.7 per cent from the year before.
Figures
Wall Street started the week steeply lower, The Dow Jones Industrial Average dropped 249 points to close at 11,547, the S&P500 fell 23 points to close at 1,193 and the Nasdaq dipped 49 points to close at 2,523.
European stocks retreated on Monday: London’s FTSE was down 140 points, Paris was down 102 points and Frankfurt was down 194 points.
To Asian markets, stocks fell: Hong Kong’s Hang Seng was down 265 points, Tokyo Nikkei was down 27 and China’s Shanghai Composite eased 1 point.
Yesterday the Australian share market pulled back from session lows to finish 0.3 per cent down: The S&P/ASX 200 Index fell 14 points to finish at 4,163. On the futures market the SPI is down 65 points.
Currencies
The Australian Dollar at 8:30AM was buying 98.52 US cents, 62.99 Pence Sterling, 75.87 Yen and 72.99 Euro cents.
Company news
Qantas Airways Limited (ASX:QAN) started the week by falling 1.2 per cent to $1.64, on the same day the airline’s negotiations with unions collapsed ahead of a midnight deadline. Qantas will now be headed for binding arbitration to legally resolve the dispute with the Transport Workers Union, the Australian and International Pilots Association and the Australian Licensed Aircraft Engineers' Association. Fair Work Australia-led arbitration is expected to continue for months and the unions have warned the dispute could continue for the following year. In the 2011 financial year Qantas reported a net profit of $249 million.
Yesterday shares in Centro Retail Group (ASX:CER) climbed 24 per cent, closing at $0.31, indicating investors are optimistic shareholders will today approve a $7 billion merger with Centro Properties Group (ASX:CNP). The restructure of the two companies into the new real estate trust, Centro Retail Australia, would create a new debt-free company worth more than $4 billion. Centro Retail’s fourth-biggest investor, Orbis Group, says it will support the restructure and major institutional investors have also reportedly backed the proposed deal. In the 2011 financial year Centro Retail Group posted a net profit of $357 million.
Ex-dividends
Two companies are going ex-dividend: Octanex with a 4 cent fully franked dividend and The Trust Company with a 17 cent fully franked dividend. Coming up later this week are Mystate and RHG.
Commodities
Gold is down $46.50 to $US1,678 an ounce for the December contract on Comex.
Silver is down $1.30 to $31.12.
Copper is down $0.099 at $3.30 a pound.
Oil is down $1.19 at $97.45 a barrel for November light crude in New York.
