The Australian share market looks set to slump after global markets retreated amid fears for the future of the 17-nation euro zone. Rising Spanish bond yields, Greece's uncertain political situation and ratings agency downgrades have fuelled anxiety about contagion in the region.
US economic news
Better than expected US earnings were offset by weaker than expected economic news: The Labor Department’s initial jobless claims figures disappointed coming in steady last week, in line with the revised figure of 370,000 from the week before. Regional manufacturing unexpectedly contracted in May, the Philly Fed index fell to -5.8 from 8.5 the month before.
Figures
Wall Street hit four month lows on Thursday: The Dow Jones Industrial Average dropped 156 points to close at 12,442, the S&P500 dropped 20 points to close at 1,305 and the Nasdaq dropped 60 points to close at 2,814.
European markets also fell on Thursday: London’s FTSE fell 67 points, Paris fell 37 points and Frankfurt fell 75 points.
Asian markets closed mixed yesterday: Hong Kong’s Hang Seng lost 59 points, Tokyo’s Nikkei gained 75 and China’s Shanghai Composite added 33 points.
The Australian share fell for a third straight session on Thursday. Yesterday, the S&P/ASX 200 index lost 8 and to close at 4,157. On the futures market the SPI is now 76 points down.
Currencies
The Australian Dollar at 7:15AM was buying 98.94 US cents, 62.67 Pence Sterling, 78.48 Yen and 77.96 Euro cents.
CEO commentary
As concern escalates about a possible Greek exit from the euro currency union, Commonwealth Bank of Australia’s (ASX:CBA) chief Ian Narev has affirmed the bank is prepared. Mr Narev says a degree of forward planning from the bank will soften any impact of a potential default and exit from the euro but Mr Narev has still cautioned the impact would be material. CBA posted a 3 per cent rise in its third quarter cash profit yesterday amid what it calls challenging conditions and an uncertain outlook. Shares in Commonwealth Bank pulled back 1.45 per cent yesterday, closing at $51.02.
Boart Longyear Limted’s (ASX:BLY) chief has brushed aside comments from BHP Billiton Limited’s (ASX:BHP) chairman and CEO, warning the global miner will be scaling back some of its investments. The drilling company’s CEO Craig Kipp says he hasn’t noted changes in the amount of global mining plans or projects. Mr Kipp says executives need to learn how to live in this variable world because it's not going to change and Europe is going to be an issue for a while. Shares in Boart Longyear rose 5.13 per cent yesterday, closing at $3.28.
Ex-dividends
Incitec Pivot Limited (ASX:IPL) with a 3.3 cent interim dividend
Commodities
Gold is up $38.30 to $US1,575 an ounce for the June contract on Comex.
Silver is up $0.82 to $28.02 for May.
Copper is up $0.001 at $3.48 a pound.
Oil is down $0.25 at $92.56 a barrel for June light crude in New York.
