The Australian share market is expected to get slammed today, after global markets were hit by disappointing Chinese manufacturing data and suggestions the US Federal Reserve may begin easing its QE stimulus this year.
Fed Chairman Ben Bernanke told media yesterday that if growth continues to pick up, the Fed could begin reeling in its bond purchases sometime later this year, and may bring the program to a close by mid-year 2014.
China economic news
Disappointing Chinese manufacturing data compounded those fears across global markets, with HSBC’s flash manufacturing read hitting a nine-month low of 48.3 for June, down on the 49.2 posted in May and lower than the 49.1 that was expected.
Currencies
The news sent the gold price to a three-year low and the Australian dollar into a spiral, falling overnight to its lowest point since September 2010. At 7:20AM the Aussie was buying $US91.98 cents, 59.35 Pence Sterling, 89.52 Yen and 69.58 Euro cents.
Figures
Wall Street dived by more than 2 per cent: The Dow Jones Industrial Average posted its biggest daily loss for the year to date, shedding 354 points to close at 14,758, the S&P 500 lost 41 points to close at 1,588 and the NASDAQ fell by 79 points to close at 3,365.
European markets were also deep in the red: London’s FTSE lost 189 points, Paris fell by 140 points and Frankfurt plunged by 269 points.
There was also blood on the streets in Asia: Hong Kong’s Hang Seng tumbled by 604 points, Tokyo’s Nikkei lost 231 and China’s Shanghai Composite was down by 59 points.
The Australian share market tumbled more than 2 per cent yesterday amid fears over the US Federal Reserve’s stimulus program exit strategy and slowing Chinese growth. The S&P/ASX 200 index sank 103 points to end the session at 4,758.
On the futures market the SPI is 81 points lower.
Commodities
Gold is down $88 to $US1,286 an ounce for the August contract on Comex. Silver is down $1.80 to $19.82 for July. Copper is down $0.01 at $3.06 a pound. Oil is down $2.84 at $US95.40 a barrel for July light crude in New York.
Company news
Intrepid Mines Limited
(ASX:IAU) has survived an attempted coup by a Hong Kong private equity group. Shareholders backed the board despite the company being ejected from its own $5 billion copper-gold mine in Indonesia last year and stripped of its 80 per cent interest by its joint venture partner. Intrepid shares closed 6.5 per cent down yesterday at 21.5 cents. The stock has plunged in market value by 80 per cent in the past 18 months.
Newcrest Mining Limited
(ASX:NCM) has turned to its former head of investor relations, Steve Warner, to help it manage questions over its continuous disclosure, according to media reports. Mr Warner, who was the contact for North American investors since Newcrest listed on the Toronto Stock Exchange, has reportedly been working alongside Newcrest's Melbourne-based investor relations manager Spencer Cole. Shares in Newcrest fell again yesterday, down 3.59 per cent to $10.75.
