The Australian share market looks to be eyeing a slightly higher start to February after posting its first monthly gain in January since October last year. Overnight soft economic data from the US tempered optimism over debt talk developments in Europe.
US economic news
The price of houses in America dropped in November last year. The S&P/Case-Shiller 20-city report has shown house prices dropped 1.3 per cent in November from the month before, down 3.7 per cent from the year before and almost 33 per cent down from their peak in 2006.
The Conference Board's index of consumer confidence fell to 61.1 in January, defying expectations for a rise of up to 68.
Figures
US markets posted a strong start to the year. In January the Dow Jones rose 4.4 per cent, the S&P 500 rose 3.4 per cent and the Nasdaq rose 8 per cent.
On Tuesday Wall Street closed mixed: The Dow Jones Industrial Average lost 21 points to close at 12,633, the S&P500 lost almost 1 point to close at 1,312 and the Nasdaq added 2 points to close at 2,814.
European markets finished higher yesterday: London’s FTSE added 11 points, Paris added 33 points and Frankfurt added 14 points.
Asian markets also rose yesterday: Hong Kong’s Hang Seng added 230 points, Tokyo Nikkei added 9 points and China’s Shanghai Composite added 8 points.
After spending much of the session in positive territory yesterday the Australian share market dipped before close to end Tuesday 0.2 per cent down: The S&P/ASX 200 Index lost 10 points to finish at 4,263. On the futures market the SPI is 8 points higher.
Currencies
The Australian Dollar at 8:40AM was buying $US1.06 cents, 67.41 Pence Sterling, 80.96 Yen and 81.21 Euro cents.
Economic news due out today
Australian Bureau of Statistics: House price indexes for eight capital cities in December 2011
Australian Industry Group and PriceWaterhouseCoopers: Australian performance of manufacturing index for January 2012
Housing Industry Association: New home sales data for December 2011
Company news
Shares in Fairfax Media Limited (ASX:FXJ) closed steady at $0.74 on Tuesday. Australia’s wealthiest person, Gina Rinehart, is reportedly bidding $192 million to increase her stake in Australia’s largest independent media company. Mrs Rinehart is believed to have approached fund managers to boost her 4 per cent stake with an extra 10 per cent stake. The 14 per cent stake would make Mrs Rinehart the company’s largest shareholder which could secure the mining billionaire a potential boardroom seat. Commonwealth Bank of Australia (ASX:CBA) is currently Fairfax’s largest shareholder with a 12.37 per cent stake. Fairfax Media reported a net loss of $390 million in the 2011 financial year.
Shares in Telstra Corporation Limited (ASX:TLS) firmed 0.6 per cent yesterday to close at $3.33. Telstra is gearing up to slash more than 200 local jobs, moving some offshore and making others redundant. Australia’s biggest Telco is understood to be planning to cut 99 administrative jobs and up to 110 sales jobs, according to Fairfax Media. A Telstra spokesperson has told Fairfax the changes will create more efficient business processes. The company plans to seek redeployment opportunities or redundancy provisions for impacted staff. In the 2011 financial year Telstra posted a net profit of $3.25 billion.
Commodities
Gold is up $6.80 to $US1,737 an ounce for the February contract on Comex.
Silver is down $0.265 to $33.26 for March.
Copper is down $0.04 at $3.79 a pound.
Oil is down $0.30 at $98.48 a barrel for March light crude in New York.
