Returning from the Easter long weekend the Australian share market is set to start the second quarter lower after Wall Street dropped overnight. Amid expectations the Reserve Bank of Australia will keep the cash rate on hold, when it announces its monthly interest rate decision this afternoon, local stocks look poised to fall into the new trading week - dragged down by weaker than expected US economic figures.
US economic news
America’s manufacturing activity slowed last month despite still remaining in expansion territory. The Institute for Supply Management’s manufacturing index came in weaker than expected, pulling back to 51.3 in March from 54.2 the month before.
Manufacturing activity in China grew at its quickest pace in almost a year. The National Bureau of Statistics-China Federation of Logistics and Purchasing’s Purchasing Managers Index increased by 0.8 percentage points to 50.9 on Monday, remaining above 50 for the sixth straight month which indicates expansion.
Figures
Despite hitting all-time high records on Thursday, Wall Street pulled back at the beginning of the trading week: The Dow Jones Industrial Average fell 6 points to close at 14,573 on Monday, the S&P 500 fell 7 points to close at 1,562 and the NASDAQ fell 28 points to close at 3,239.
Ahead of the Easter long weekend European markets closed higher on Thursday: London’s FTSE added 24 points, Paris added 20 points and Frankfurt added 6 points.
Across Asia markets remain lower: Hong Kong’s Hang Seng fell 165 points on Thursday, Tokyo’s Nikkei fell 263 and China’s Shanghai Composite dipped 2 points on Monday.
The Australian share market closed lower over last week after falling 0.6 per cent on Thursday: The S&P/ASX 200 Index dropped 29 points on Thursday and lost 0.8 points over the week to finish at 4,967. On the futures market the SPI is 37 points down.
Currencies
The Australian Dollar at 7:20AM was buying $US1.042 cents, 68.45 Pence Sterling, 97.31 Yen and 81.13 Euro cents.
Economic news due out today
Reserve Bank of Australia: April interest rate decision and index of commodity prices for March
Australian Industry Group: Performance of Manufacturing Index for March
RP Data-Rismark: Home price index
Asset sales Rio Tinto Limited
(ASX:RIO) and BHP Billiton Limited
(ASX:BHP) are reportedly considering putting $US30 billion of assets up for sale. Commonwealth Bank of Australia’s
(ASX:CBA) analysts have told News Corp
(ASX:NWS) the two global miners are considering divesting non-core and underperforming assets to boost shareholder returns. The analysts claim Rio Tinto only had four “tier-one” assets last year. Shares in Rio Tinto dropped 1.07 per cent to finish the week at $57.20.
Elders Limited
(ASX:ELD) expects to gain $29 million net cash proceeds after completing the sale of its assets associated with the Indian Sandalwood projects. The rural services company says these proceeds will be put to reducing its debt. Elders narrowed its full year net loss to $60.6 million in the year to the end of September 2012 and the company’s shares lost more than 50 per cent over the same period. Shares in Elders closed steady at $0.12 before the announcement was made on Thursday afternoon.
Ex-dividends
Aberdeen Leaders Limited
(ASX:ALR) with a 2 cent fully franked dividend
Macquarie Atlas Roads Limited
(ASX:MQA) with a 2.4 cent unfranked dividend
Southern Cross Media Group Limited
(ASX:SXL) with a 4.5 cent fully franked dividend
Tasmania Mines Limited
(ASX:TMM) with a 6 cent fully franked dividend
Commodities
Gold is up $4.20 to $US1,600 an ounce for the June contract on Comex.
Silver is down $0.37 to $27.94 for May.
Copper is up $0.01 at $3.37 a pound.
Oil is down $0.34 at $US96.89 a barrel for May light crude in New York.
