Following mixed offshore leads and after China’s interest rate cuts, the Australian share market is poised for a higher start to the day.
US economic news
Federal Reserve chairman Ben Bernanke has testified before the Joint Economic Committee overnight about the economic outlook and said the Federal Reserve was ready to act should the eurozone crisis worsen, however failed to indicate what measures would take place.
Consumer credit rose in April for the eighth straight month but coming in lower than expected. According to the Federal Reserve, lending climbed by $6.5 billion, boosted by financing for education and cars, however, it is the lowest rise recorded this year.
The Labor Department has shown US unemployment benefits dropped last week, for the first time in five weeks. Weekly benefits fell by 12,000 to 377,000. 389,000 was reported the week before.
China has lowered interest rates the first time since 2008. One-year lending rates will drop to 6.31 per cent from 6.56 per cent, effective today.
Figures
Wall Street closed mixed yesterday: The Dow Jones Industrial Average gained 46 points to close at 12,461, the S&P500 lost 0.14 points to close at 1,315 and the Nasdaq lost 14 points to close at 2,831.
European markets closed up: London’s FTSE gained 64 points, Paris was up by 13 and Frankfurt gained 50 points.
Asian markets closed mixed: Hong Kong’s Hang Seng added 158 points, Tokyo’s Nikkei added 107 and China’s Shanghai Composite lost 16 points.
The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 53 points up to finish at 4,109. On the futures market the SPI is 14 points higher.
Currencies
The Australian Dollar at 7:15AM was buying $98.98 US cents, 63.76 Pence Sterling, 78.81 Yen and 78.81 Euro cents.
Economic news
Due out today from the Australian Bureau of Statistics is international trade in goods and services for April and housing finance for April.
Company news
Cabcharge Australia Limited (ASX:CAB) has concluded negotiations for the purchase of the Yellow Cabs business in Adelaide with the acquisition expected to be completed by early next month. Yellow Cabs provides services to around 250 cabs in Adelaide, using a new MTData dispatch system. Cabcharge says the purchase price for the company was less than $4 million with the transaction fully funded internally. The acquisition includes a minibus charter fleet and an in vehicle equipment installation business. Shares in Cabcharge closed 0.35 per cent down yesterday at $5.70.
iProperty Group Limited (ASX:IPP) has raised $10 million through a private placement to existing shareholders and new institutional investors. The online property advertiser has also advised a share purchase plan will open next week aiming to raise a minimum of $1 million. The details include a discounted issue price of $1.00 per share OR a 6 per cent discount to the volume -weighted average closing price. The offer is open to existing share holders at the record date of the 6 June with each shareholder entitled to purchase up to $15,000 in new stock.
iProperty is focused on developing and operating real estate internet portals in Asia under its umbrella brand. Shares in iProperty closed 4.63 per cent down yesterday at $1.03.
Ex-dividends
Three companies are going ex-dividend today:
Joyce Corporation Limited (ASX:JYC)
Thorn Group Limited (ASX:TGA)
Tower Limited Australia (ASX:TWR)
Commodities
Gold is down $46.20 to $US1,588 an ounce for the August contract on Comex.
Silver is down $0.95 to $28.54 for July.
Copper is down $0.01 at $3.37 a pound.
Oil is down $0.20 at US$84.82 a barrel for July light crude in New York.
