The SPI is pointing to a soft start for the Australian share market after Wall Street lifted modestly on better than expected housing figures but investors remained cautious ahead of tomorrow’s European Union (EU) summit.
US economic news
Investors were encouraged by news American house prices increased in April, despite a read on consumer confidence coming in weaker than expected. The S&P/Case-Shiller home price index showed the average price of a US home lifted for the first time in seven months, gaining 1.3 per cent in April. The Conference Board reported consumer confidence eased for a fourth straight month, defying expectations for a rise.
Wall Street closed higher on Tuesday, recovering slightly from Monday’s falls: The Dow Jones Industrial Average added 32 points to close at 12,535, the S&P500 added 6 points to close at 1,320 and the Nasdaq added 18 points to close at 2,854.
European markets finished mixed on Tuesday: London’s FTSE lost 4 points, Paris lost 9 points and Frankfurt added 4 points.
Asian markets also ended mixed yesterday: Hong Kong’s Hang Seng added 84 points, Tokyo’s Nikkei lost 71 and China’s Shanghai Composite lost 2 points.
The Australian share market closed lower for a fourth straight session on Tuesday, shedding 0.4 per cent: The S&P/ASX 200 Index lost 15 points down to finish at 4,013. On the futures market the SPI is 8 points higher.
The Australian Dollar at 7:20AM was buying $US1.006 cents, 64.35 Pence Sterling, 79.99 Yen and 80.56 Euro cents.
Best and worst performing stocks
Shares in Billabong International Limited (ASX:BBG) rose to the top 200’s best performer on Tuesday, recovering just slightly from almost halving its market value on Monday. The gains came as fresh hopes emerged for a private equity offer to take over the troubled surf and snow wear retailer. Billabong received a $3.00 per share takeover bid from TPG Capital in February which it subsequently rejected, claiming the bid did not reflect the fundamental value of the company. Shares in Billabong International rose 6.25 per cent on Tuesday, closing at $1.02.
Shares in Seven West Media Limited (ASX:SWM) slumped to Tuesday’s worst performer after surprising the market and appointing the former head of Woodside Petroleum Limited (ASX:WPL), Don Voelte, as its new CEO to replace David Leckie. Seven West Media’s director Peter Gammell has since told The Australian he blames short-sellers for the share price drop. The report also speculates the share price drop could be partly due to speculation of a capital raising after the company cut its guidance in April. Shares in Seven West Media slumped 13.71 per cent on Tuesday, finishing at $1.70.
Trojan Equity Limited (ASX:TJN): 13.5 cent fully franked dividend
Gold is down $13.50 to $US1,575 an ounce for the August contract on Comex.
Silver is down $0.52 to $27.07 for July.
Copper is down $0.003 at $3.32 a pound.
Oil is up $0.11 at $US79.46 a barrel for August light crude in New York.