Weak leads from Wall Street look to push the Australian share market lower at open ahead of the Reserve Bank of Australia’s (RBA) monthly decision on interest rates this afternoon when the Central Bank is tipped to cut Australia’s key cash rate. Overnight US investors overlooked upbeat Chinese manufacturing figures as a worse than expected read on the nation’s own manufacturing industry weighed on sentiment.
US economic news
America’s manufacturing activity has dropped to a three and a half year low. The Institute of Supply Management’s index dropped to 49.5 in November, with a read below 50 indicating contraction.
Figures
Wall Street started the week lower: The Dow Jones Industrial Average lost 60 points to close at 12,966, the S&P500 lost 7 points to close at 1,409 and the Nasdaq lost 8 points to close at 3,002.
European markets fished higher on Monday: London’s FTSE added 4 points, Paris added 9 points added Frankfurt added 30 points.
Asian markets closed mixed on Monday: Hong Kong’s Hang Seng lost 263 points, Tokyo’s Nikkei added 12 and China’s Shanghai Composite lost 20 points.
The Australian share mark started the week 0.6 per cent higher yesterday: The S&P/ASX 200 index gained 26 points to finish at 4,532. On the futures market the SPI is now 14 points lower.
Currencies
The Australian Dollar at 8:20AM was buying $US1.042 cents, 64.79 Pence Sterling, 85.72 Yen and 79.87 Euro cents.
Economic news due out today
The Reserve Bank of Australia: December interest rate decision
The Australian Bureau of Statistics: Building approvals for October, balance of payments and international investment position for September quarter and government finance statistics for the September quarter.
Company news Singapore Airlines and Etihad are reportedly looking to boost their stakes in Virgin Australia Holdings Limited
(ASX:VAH) to increase their exposure to the Asia-Pacific region. The renewed speculation comes as Singapore Airlines revealed it is considering divesting part of its interest in British carrier Virgin Atlantic and after Singapore Airlines secured a 10 per cent stake in Virgin Australia in October. Separately, Virgin yesterday reported increased passenger growth on the back of stronger passenger volumes on transcontinental routes. Shares in Virgin Australia Holdings closed steady at $0.44 on Monday.
Takeover target Graincorp Limited
(ASX:GNC) has reportedly had its takeover bid from US agribusiness Archer Daniels Midland boosted to $2.8 billion. Archer Daniels Midland is understood to have increased its bid by 3.8 per cent after boosting its stake in the grain handler by 5 per cent. Archer Daniels Midland now has a 19.9 per cent stake in Graincorp, who rejected its suitor first takeover approach last month. Shares in Graincorp gained 0.34 per cent to close at $11.94 on Monday.
Ex-dividends this week
Collins Foods Limited
(ASX:CKF) with a 4 cent fully franked dividend
Lemarne Corporation Limited
(ASX:LMC) with a 7 cent unfranked dividend
Asian Centre For Liver Diseases
(ASX:AJJ) with a 0.3 cent unfranked dividend
Technology One Limited
(ASX:TNE) with a 3.48 cent, 85 per cent franked dividend
Sky Network Television Limited
(ASX:SKT) with a 37.65 cent unfranked dividend
Commodities
Gold is up $8.40 to $US1,721 an ounce for the February contract on Comex.
Silver is up $0.48 to $33.76 for March.
Copper is up $0.01 at $3.66 a pound.
Oil is up $0.18 at $US89.09 a barrel for January light crude in New York.
