The SPI is pointing to a soft start for the Australian share market following mixed offshore leads. Wall Street trimmed earlier gains but closed mainly higher on hopes for European debt deals and an encouraging read on consumer confidence, also lifting the Australian dollar above parity.
US economic news
The Conference Board's consumer confidence index rose more than expected. The index climbed to 56 in November from 40.9 the month before. It was the largest monthly increase since April 2003.
The S&P/Case Shiller index fell more than expected. The gauge of US house prices declined 3.9 per cent in the third quarter compared to the year before and added 0.1 per cent compared to the quarter before. House prices have now dropped to an eight year low.
Figures
Wall Street finished mixed on Tuesday: The Dow Jones Industrial Average rose 33 points to close at 11,556, the S&P500 added 3 points to close at 1,195 and the Nasdaq eased 12 points to close at 2,516.
European stocks finished higher on Tuesday: London’s FTSE was up 24 points, Paris was up 14 points and Frankfurt was up 55 points.
To Asian markets, stocks closed higher: Hong Kong’s Hang Seng was up 218 points, Tokyo Nikkei was up 190 and China’s Shanghai Composite up 29 points.
The Australian share market ended a choppy day of trade 1 per cent higher on Tuesday: The S&P/ASX 200 Index added 44 points to finish at 4,102. On the futures market the SPI is 24 points lower.
Currencies
The Australian Dollar at 8:35AM was buying $US1.0024, 64.26 Pence Sterling, 78.08 Yen and 75.27 Euro cents.
Economic news
Due out today from the Australian Bureau of Statistics: Private new capital expenditure and expected expenditure data for the September quarter.
Released yesterday from the Federal Government: The Mid-Year Economic and Fiscal Outlook (MYEFO) report and announcement of $6.8 billion in spending cuts. The prospective budget deficit has increased from $22.6 billion to $37.1 billion in 2011-12. The government is aiming to deliver a surplus of $1.5 billion for 2012-13, down from an original surplus target of $3.5 billion.
Company news
Business leaders have joined economists in casting doubt over the government’s plans to return to surplus:
Shares in Commonwealth Bank of Australia (ASX:CBA) gained 1.02 per cent yesterday, closing at $47.37. The outgoing chief of CBA, Ralph Norris, says the target for a budget surplus is threatened by a weakening global economy. Mr Norris told Fairfax Media he won’t be betting his house on a surplus because of uncertainty surrounding world markets and growth projections and the impact on our domestic economy. Commonwealth Bank generated a net profit to $6.4 billion in fiscal 2011.
Shares in Harvey Norman Holdings Limited (ASX:HVN) firmed 0.99 per cent on Tuesday, finishing at $2.05. Executive chairman Gerry Harvey has questioned why the government wants to return to surplus when a large percentage of Australian businesses are under stress. Speaking at the electronic retailer’s annual meeting yesterday, Mr Harvey said if returning to surplus doesn’t make sense, it shouldn’t be pursued. Harvey Norman Holdings posted a net profit of $259.6 million in fiscal 2011.
Commodities
Gold is up $2.60 to $US1,713 an ounce for the December contract on Comex.
Silver is down $0.31 to $31.85.
Copper is up $0.02 at $3.38 a pound.
Oil is up $1.58 at $99.79 a barrel for January light crude in New York.
