The Australian share market is pointing to a sharp decline in early trade but analysts say the losses should be softened by better than expected Chinese manufacturing data released over the weekend.
China's official PMI rose to 50.8 in May from 50.6 in April, beating market expectations and raising optimism that the world's second-largest economy may be stabilising.
We will get a fuller picture of the Chinese economy today with the official services PMI released along with the final HSBC survey that focuses on smaller private sector firms in the country.
Currencies
The Aussie dollar has tumbled this morning after those heavy falls on Wall Street on Friday night. The Aussie continued its slide amid fresh data showing record unemployment in the eurozone and continued uncertainty about the outlook for United States stimulus.
FNN spoke to Saxo Bank Chief Economist Steen Jakobsen, who says the Australian dollar is in a correction phase.
At 7:20AM the Australian dollar was buying $US96.17 cents,63.3 Pence Sterling, 96.75 Yen and 74.08 Euro cents. And all eyes will be on the dollar this week, with a raft of economic news expected including tomorrow’s monthly RBA decision.
Figures
Wall Street suffered steep falls on Friday on disappointing consumer spending data: The Dow Jones Industrial Average lost 209 points to close at 15,116, the S&P500 lost 24 points to close at 1,631 and the Nasdaq lost 35 points to close at 3,456.
European markets declined on record unemployment figures: London’s FTSE lost 74 points, Paris shed 48 points and Frankfurt lost 51 points.
Asian markets were mixed: Hong Kong’s Hang Seng lost 92 points, Tokyo’s Nikkei added 186 and China’s Shanghai Composite shed 17 points.
The Australian share market ended the week and month of May in the red. The 5.1 per cent fall for the month was the worst monthly performance since the 7.3 per cent drop in May last year. The S&P/ASX 200 index lost 4 points on Friday extending the weekly decline of 57 points to finish at 4,927.
On the futures market the SPI is 57 points down.
Economic news
The Australian Bureau of Statistics will today release its business indicators for March quarter and retail trade figures for April and ANZ will release its job advertisements data for May.
Company news
Telstra Corporation Limited
(ASX:TLS) is at risk of being hit by lawsuits from contractors and residents impacted by asbestos mishandled during NBN works, according to media reports. Investigations into the incidents are reportedly under way, but Workplace Relations Minister Bill Shorten has called on Telstra to establish a fund to compensate workers who may have been exposed to the hazardous material. Shares in Telstra dropped 0.63 per cent on Friday to close at $4.74.
Leighton Holdings Limited
(ASX:LEI) has confirmed rumours its subsidiary Thiess suspended operations at two Indonesian coal mines amid a payment dispute with their owners. The company says the dispute is not expected to have any material impact on the its results. Shares in Leighton slumped by 4.92 per cent on Friday to close at $17.59.
Ex-dividend Aristocrat Leisure Limited
(ASX:ALL) will pay 7 cents per share unfranked
Kathmandu Holdings Limited
(ASX:KMD) will pay 2.49 cents per share fully franked
Ruralco Holdings Limited
(ASX:RHL) will pay 10 cents per share fully franked
Technology One Limited
(ASX:TNE) will pay 1.77 cents per share partially franked
Commodities
Gold is down $59.50 to $US1,393 an ounce for the August contract on Comex. Silver is down $0.45 to $22.24 for July. Copper is down $0.02 at $3.29 a pound. Oil is down $1.64 at US$91.97 a barrel for July light crude in New York.
