The Australian share market looks to open in the red, despite global markets rising after better than expected Chinese and US economic data, a strong read on German investor confidence and successful debt auctions in Spain, Greece and Europe's bailout fund.
Economic news
China's economy grew at a faster pace than expected at the end of 2011, despite growing at the slowest rate in 2.5 years. China’s National Bureau of Statistics has reported the nation’s economy expanded at a rate of 8.9 per cent in the fourth quarter of 2011, slowing from a rate of 9.1 per cent the quarter before. In comparison, the US economy grew by 1.8 per cent in the third quarter and fourth quarter figures are yet to be released.
US economic news
A gauge of manufacturing activity has come in better than expected. The Federal Reserve’s empire state manufacturing survey increased to its highest point in nine months in January 2012. General business conditions index increased to 13.5 points from 8.2 points the month before. A reading greater than zero indicates expansion.
Figures
After closing on Monday for the Martin Luther King Jr public holiday, Wall Street started its trading week higher: The Dow Jones Industrial Average gained 60 points to close at 12,482, the S&P500 gained 5 points to close at 1,294 and the Nasdaq gained 17 points to close at 2,728.
European markets rose on Tuesday: London’s FTSE was up 37 points, Paris was up 45 points and Frankfurt was up 113 points.
Asian markets also finished higher yesterday: Hong Kong’s Hang Seng was up 616 points, Tokyo Nikkei was up 88 and China’s Shanghai Composite was up 92 points.
The Australian share market extended gains after the release of Chinese data to end 1.65 per cent stronger on Tuesday: The S&P/ASX 200 Index gained 68 points to finish at 4,216. On the futures market the SPI is currently 9 points lower.
Currencies
The Australian Dollar at 8:50AM was buying $US1.038 cents, 67.7 Pence Sterling, 79.75 Yen and 81.49 Euro cents.
Economic news due out today
The Australian Bureau of Statistics: New motor vehicle sales data for November and international merchandise imports data for December 2011.
Westpac Banking Corporation (ASX:WBC) and the Melbourne Institute: Survey of consumer sentiment for January 2012.
Company news
Shares in ANZ Banking Group (ASX:ANZ) closed 0.91 per cent higher on Tuesday at $21.05. Confirming speculation, ANZ Bank yesterday began its first round of job cuts in Australia in an effort to manage costs. The bank has cut 130 positions from its retail and commercial operations with reports up to 1,000 jobs could go in the next six months. Fellow banks, Commonwealth Bank of Australia (ASX:CBA), National Australia Bank Limited (ASX:NAB) and Westpac Banking Corporation (ASX:WBC) are also understood to be considering or preparing to trim their local workforce this year. ANZ reported a net profit of $5.4 billion in the 2011 financial year.
Shares in Commonwealth Bank of Australia (ASX:CBA) finished 0.67 per cent higher yesterday at $49.84. Commonwealth Bank has launched its first covered bond in Australia for $3.5 billion. The Australian newspaper has called it the largest bank bond transaction carried out in Australia and says CBA was forced to pay hefty rates because of higher wholesale funding costs. 80 per cent of the debt was reportedly purchased by domestic investors and the remaining 20 per cent taken up by international investors. In the 2011 financial year Commonwealth Bank reported a net profit to $6.4 billion.
Commodities
Gold is up $24.80 to $US1,655 an ounce for the February contract on Comex.
Silver is up $0.61 to $30.14 for March.
Copper is up $0.09 at $3.73 a pound.
Oil is up $2.01 at $100.71 a barrel for February light crude in New York.
