As the Christmas holidays approach the Australian share market looks set for a cautious start in light trading volume. Overseas markets failed to sustain initial gains after the European Central Bank said 523 banks had borrowed a record €489 billion in cheap three year loans. The move is geared to supporting the flow of credit in the region but markets waivered as scepticism emerged. On the domestic front no economic news is scheduled for release today but the Federal Government has just announced that ratings agency Moody’s has reaffirmed Australia’s AAA credit rating.
Figures
Following Tuesday’s gains, Wall Street closed mixed on Wednesday: The Dow Jones Industrial Average added 4 points to close at 12,108, the S&P500 added 2 points to close at 1,244 and the Nasdaq retreated 26 points to close at 2,578.
European markets finished lower Wednesday: London’s FTSE was down 30 points, Paris was down 25 points and Frankfurt was down 56 points.
Asian markets finished mixed: Hong Kong’s Hang Seng was up 336 points, Tokyo Nikkei was up 124 and China’s Shanghai Composite down 25 points.
The Australian share market jumped at the open and finished more than 2 per cent stronger yesterday: The S&P/ASX 200 Index advanced 86 points to close at 4,140. On the futures market the SPI is 4 points lower.
Currencies
The Australian Dollar at 8:40AM was buying $US1.0098 cents, 64.43 Pence Sterling, 78.88 Yen and 77.41 Euro cents.
Company news
Shares in Fortescue Metals Group Limited (ASX:FMG) gained 3.21 per cent on Wednesday, closing at $4.50. Doubts have been raised if Fortescue will be able to keep within its $US8.4 billion expansion budget after the iron ore miner finalised a contract with Macmahon Holdings Limited (ASX:MAH) for 10 per cent more than was previously disclosed. Fortescue has finalised a $330 million contract with Macmahon for work at its Solomon Rail project as part of Fortescue’s plan to boost production to 155 million tonnes per annum by 2013. A spokesman for McMahon has told Fairfax the contract fee has risen from Augusts’ estimate due to “further refinement of the scope and design undertaken”. In the 2011 financial year Fortescue Metals Group recorded a net profit of $952 million.
Shares in Devine Limited (ASX:DVN) dipped 0.65 per cent yesterday, closing at $0.77. Residential developer Devine has warned its annual pre-tax profit is expected to drop by 30 per cent due to deteriorating market conditions across Australian property markets. As a result the company expects to book a $10 million pre-tax profit in the first half of the current financial year and a $20 million pre-tax profit in the full 2012 financial year. Devine says market conditions have delayed its ability to bring new projects to the market but it expects these projects to contribute to earnings in the following financial year. In the 2011 financial year Devine boosted its net profit by 147 per cent to $20.2 million.
Commodities
The price of gold is down $4.00 to $US1,613 an ounce for the February contract on Comex.
Silver is down $0.29 to $29.25 for March.
Copper is up $0.03 at $3.39 a pound.
Oil is up $1.43 at $98.67 a barrel for February light crude in New York.
