Despite a positive lead from Wall Street the Australian share market looks to start the week lower. US stocks reversed earlier losses on Friday, in choppy trade with light volume, as investors digested a week of mixed housing reports and figures fuelling concerns over slowing growth in China and Europe. At home it’s a quiet week on the economic front, but a series of economic reports are due in the US.
US economic news
The latest report on new home sales has missed expectations. According to The Commerce Department new home sales in America dropped 1.6 per cent in February from the month before, coming in at an annual pace of 313,000, the lowest rate since October.
Figures
Wall Street closed higher on Friday: The Dow Jones Industrial Average added 35 points to close at 13,081. The S&P500 added 4 points to close at 1,397. The Nasdaq added 5 points to close at 3,068.
European markets also finished higher on Friday: London’s FTSE added 9 points, Paris added 4 points and Frankfurt added 14 points.
Asian markets also closed lower on Friday: Hong Kong’s Hang Seng lost 233 points, Tokyo’s Nikkei lost 116 and China’s Shanghai Composite lost 26 points.
The Australian share market clawed back from steeper losses to end 0.1 per down at the end of last week: The S&P/ASX 200 Index lost 3 points for the day, and 6 points for the week, to finish at 4,270 on Friday. On the futures market the SPI is 12 points lower.
Currencies
The Australian Dollar at 8:30AM was buying $US1.0466 cents, 65.91 Pence Sterling, 86.26 Yen and 78.87 Euro cents.
Company news
Shares in BHP Billiton Limited (ASX:BHP, NYSE:BHP) fell 1.15 per cent on Friday, closing at $34.40. One week after the mining tax was passed by the Senate, analysts have cast doubt on the Federal Government’s plans to generate $10.6 billion in revenues over the Mineral Resource Rent Tax’s first three years. According to The Australian, Goldman Sachs and UBS expect BHP will pay $443 million in the next fiscal year while rival miner Rio Tinto Limited (ASX:RIO) will pay a minimum of $454 million on its Hamersley iron ore unit in Western Australia which would drop to zero after three years. The report says projected revenues will likely take a further hit with softening commodity prices, a strong Australian dollar and higher costs. In the first half of its 2012 financial year BHP reported a net profit of $9.88 billion.
Shares in Qantas Airways Limited (ASX:QAN) dropped 1.98 per cent on Friday, closing at $1.73. The world’s best airline food has been revealed and Qantas has made it into the seventh spot. A survey of 19 international airlines, carried out by flight comparison site Skyscanner, declared Turkish Airlines had the best food on board scoring 86 per cent satisfaction. Singapore Airlines took the second spot followed by Middle-East based Etihad Airways in third. In the first half of its 2012 financial year Qantas reported a net profit of $42 million.
Commodities
Gold is up $22 to $US1,662 an ounce for the April contract on Comex.
Silver is up $0.927 to $32.27 for May.
Copper is up $0.05 at $3.81 a pound.
Oil is up $1.52 at $106.87 a barrel for April light crude in New York.
