The Australian share market is likely to open flat today, as it looks for direction ahead of the RBA’s July board meeting.
World economic news
World markets gained overnight on data which showed US manufacturing expanded in June, while positive data from Japan and Europe pointed to stabilising economies.
Australian economic news
The Reserve Bank of Australia is unlikely to cut interest rates when it meets today amid the falling Australian dollar.
According to a survey of economists, most are forecasting the cash rate to remain at its record low of 2.75 per cent.
The RBA last cut the cash rate in May, when the Australian dollar was still above parity with the greenback.
At the time the central bank said the high Australian dollar was one of the reasons why conditions remained tough for business.
Currencies
And all eyes will be on the Australian dollar after that announcement from the RBA this afternoon. At 7:20AM the Aussie was buying $US92.4 cents, 60.73 Pence Sterling, 92.07 Yen and 70.74 Euro cents.
Figures
Wall Street was in positive territory: The Dow Jones Industrial Average gained 65 points to close at 14,975, the S&P 500 added 9 points to close at 1,615 and the NASDAQ jumped 31 points to close at 3,434.
European markets rose on encouraging manufacturing data which suggests the eurozone economy may be climbing out of recession: London’s FTSE climbed 92 points, Paris gained 29 points and Frankfurt lifted by 25 points.
Asian markets were buoyed by the Bank of Japan's closely-watched quarterly tankan survey for June which showed a significant pick-up in manufacturing. It was the first positive reading since September 2011: Tokyo’s Nikkei added 175 points, Hong Kong’s Hang Seng was closed for a public holiday, and China’s Shanghai Composite gained 16 points.
The Australian share market had a poor start to the new financial year, closing 1.9 per cent down yesterday. The S&P/ASX 200 index closed 92 points down to finish at 4,710.
On the futures market the SPI is 4 points up.
Company news
Watpac Limited
(ASX:WTP) has won a $146 million Defence contract for construction work at 16 bases on Australia's east coast. The Queensland-based contractor will begin works for the Department of Defence in July and are scheduled for completion by next December. Shares in Watpac finished 1.82 per cent higher yesterday to close at 56 cents.
Wesfarmers Limited
(ASX:WES) owned Coles has hit out at the ACCC, which fined the retailer over alleged misleading representations about the country of origin of fresh produce. Coles described the ACCC's handling of the matter as an appalling regulatory process, according to media reports. Shares in Wesfarmers slid 2.55 per cent yesterday, to close at $38.59.
Ex-dividend Alternative Invest
(ASX:AIQ) will pay 4 cents per share unfranked.
Commodities
Gold is up $44.10 to $US1,256 an ounce for the August contract on Comex. Silver is up $0.11 to $19.58 for September. Copper is up $0.10 at $3.16 a pound. Oil is $1.43 higher at US$97.99 a barrel for August light crude in New York.
