The Australian share market is tipped to recover some of its steep losses, despite a global equity sell-off around the world overnight.
Wall Street dipped after even bigger declines in international markets, especially in Japan, where the market sank 7.3 per cent after Chinese manufacturing data showed a contraction in May for the first time in seven months.
FNN spoke to John Noonan of Thomson Reuters who says China is going through a transition phase to focus less on exports and more on domestic consumption.
Figures
The Dow Jones Industrial Average lost 13 points to close at 15,295, the S&P 500 lost 5 points to close at 1,651 and the NASDAQ lost 4 points to close at 3,459.
London’s FTSE lost 143 points, Paris dived by 84 points and Frankfurt was 179 points lower.
Hong Kong’s Hang Seng lost 591 points, Tokyo’s Nikkei tumbled by 1,143 and China’s Shanghai Composite was 26 points down.
US economic news
The number of Americans applying for unemployment benefits fell by 23,000 last week to 340,000. Economists see it as evidence the US job market is slowly picking up.
Meantime, sales of new homes in the US rose in April to the second highest level since 2008 while the median price for a new home hit a record high.
New home sales rose to an annual rate of 454,000 in April, up 2.3 per cent from March.
Australian market
The Australian share market plunged 2 per cent yesterday as weak Chinese manufacturing figures and headlines sparked fears of a global slowdown. The S&P/ASX 200 index plunged 103 points to end the session at 5,062.
On the futures market the SPI is 16 points higher.
Currencies
The Australian dollar recovered slightly overnight, staying firmly below parity but higher than the 11-month low it reached during yesterday’s session. At 7:20AM the Aussie was buying $US97.53 cents, 64.55 Pence Sterling, 99.37 Yen and 75.42 Euro cents.
Company news
Crown Limited
(ASX:CWN) has offloaded its 10 per cent stake in rival Echo Entertainment Group Limited
(ASX:EGP) - a sign it is confident of gaining approval for its own casino in Sydney. The sale of the stake to institutional investors in a bookbuild late yesterday was priced at $3.20 a share, a 7 per cent discount on Echo's closing price of $3.44 on Thursday. Crown's stake in Echo was viewed as an insurance policy should the government reject its Barangaroo proposal. Shares in Crown lifted 0.77 per cent yesterday to close at $13.06.
BHP Billiton Limited
(ASX:BHP) Chief Executive Andrew Mackenzie has made comments leading analysts to believe the mining giant may shelve expansion projects. Mr Mackenzie told investors this week that BHP would cut capital expenditure by $4 billion in 2014. Analysts say the $12 billion Jansen potash project in Canada and the Cannington silver and base metals mine in northwest Queensland are under question. Shares in BHP dipped 1.11 per cent to close at $34.88.
Ex-dividend
Australian Governance Master Index Fund Limited
(ASX:AQF) will pay 3 cents per share fully franked.
Commodities
Gold is up $24.40 to $US1,392 an ounce for the June contract on Comex. Silver is up $0.04 to $22.51 for July. Copper is down $0.08 at $3.30 a pound. Oil is down $0.03 at $US94.25 a barrel for July light crude in New York.
