Negative offshore leads look to push the Australian share market in the red at the start of the week. On Wall Street stronger than expected earnings were offset by weaker than expected Chinese growth figures. Sentiment was also knocked about with fears Europe’s sovereign debt crisis is reigniting in Spain and Italy.
China economic news
The pace of economic growth in China has dropped to near a three year low. Figures released on Friday from China’s National Bureau of Statistics showed the world's second-largest economy grew by 8.1 per cent in the first three months of this year, falling from a growth rate of 8.9 per cent the quarter before and representing the fifth straight quarter of slowing growth.
US economic news
Consumer sentiment in America has dipped more than expected this month. Thomson Reuters and the University of Michigan’s Consumer Sentiment Index dropped to 75.7 in April from 76.2 the month before.
The US Government’s inflation gauge rose modestly, in line with expectations, last month. According to the Labor Department the Consumer Price Index increased 0.3 per cent in March. Over the year, consumer prices have increased 2.7 per cent, down from 2.9 per cent in February.
Figures
Wall Street dropped at the end of last week, posting the steepest weekly falls this year: On Friday The Dow Jones Industrial Average lost 137 points to close at 12,850, the S&P500 lost 17 points to close at 1,370 and the Nasdaq lost 44 points to close at 3,011.
European markets also dropped at the end of last week: London’s FTSE lost 59 points, Paris lost 81 points and Frankfurt lost 159 points.
Asian markets closed higher on Friday: Hong Kong’s Hang Seng added 374 points, Tokyo’s Nikkei added 113 and China’s Shanghai Composite added 8 points.
The Australian share market gained 1 per cent on Friday: The S&P/ASX 200 index added 43 points on Friday, but finished the holiday shorted week just 3 points higher at 4,323. On the futures market the SPI is now 31 points down.
Currencies
The Australian Dollar at 7:15AM was buying $US1.0376 cents, 65.5 Pence Sterling, 83.97 Yen and 79.44 Euro cents.
Economic news due out today
Australian Bureau of Statistics: Lending finance data for February
Company news
Shares in Rio Tinto Limited (ASX:RIO, NYSE:RIO) rose 2.31 per cent on Friday, closing at $65.95. Speculation is circling this morning that US private equity giant Kohlberg Kravis Roberts (NYSE:KKR) is planning to purchase Rio and BHP Billiton Limited’s (ASX:BHP) diamond units and merge the operations. Rio put its diamond business under review earlier this month amid falling demand for the product, after BHP announced a review of its diamond business last year which has already resulted in divestments. While both global miners are yet to comment on the speculation, their combined diamond assets make up about 16 per cent of global diamond supply which together would place them as the world’s third biggest producer. Rio Tinto will tomorrow release its first-quarter production report with BHP’s due on Wednesday. In the 2011 financial year Rio Tinto reported a full year net profit of $6.7 billion.
Shares in Gunns Limited (ASX:GNS) remain in a trading halt and last traded at $0.160. Tasmanian timber company Gunns is reportedly in the process of selling its export woodchip terminal at the Port of Portland in western Victoria. A Gunns spokesperson has told AAP the company plans to be a pulp producer rather than a woodchip exporter just days after Gunns confirmed it’s considering a name change. Shares in Gunns entered into a trading halt on March 9, 2012 as the company prepares for a proposed $400 million equity raising to pay down debt. In the first of its 2012 financial year Gunns posted a net loss of $173 million.
Ex-dividends today
Brickworks Limited (ASX:BKW)
Countplus Limited (ASX:CUP)
F.F.I. Holdings Limited (ASX:FFI)
Premier Investments Limited (ASX:PMV)
Commodities
Gold is down $11.30 to $US1,660 an ounce for the June contract on Comex.
Silver is down $1.135 to $31.39 for May.
Copper is down $0.09 at $3.63 a pound.
Oil is down $0.81 at $102.83 a barrel for May light crude in New York.
