The Australian share market is set to open in positive territory after US markets shrugged off turmoil in Portugal and instead focused on upbeat US economic data.
There was a broad sell-off across Europe, with investors spooked by signs of instability in Portugal. Portugal's PSI 20 index fell 5.31 per cent as the government teetered on the brink of collapse.
US economic news
But US economic data was encouraging. A payrolls firm estimated 188,000 private-sector jobs were created in June, well above the May reading of 134,000.
Meantime the weekly Labor Department report on jobless claims was also a positive, as claims fell 5,000 below the previous week's level to 343,000. Investors are waiting for the monthly US employment figures due at the end of the week.
Figures
Wall Street was on the up in a shortened session ahead of the Independence Day Holiday: The Dow Jones Industrial Average gained 56 points to close at 14,989, the S&P 500 added 1 point to close at 1,615 and the NASDAQ lifted by 10 points to close at 3,444.
European markets went south on that news from Portugal: London’s FTSE lost 74 points, Paris dipped by 41 points and Frankfurt shed 81 points.
Asian markets closed sharply lower after a disappointing reading on non-manufacturing PMI in another sign of China’s economic slowdown: Hong Kong’s Hang Seng plummeted 511 points, Tokyo’s Nikkei dropped 43 points and China’s Shanghai Composite fell 12 points.
The Australian share market closed 1.9 per cent down, wiping approximately $25 billion off the market. The S&P/ASX 200 index closed 90 points down to finish at 4,744.
On the futures market the SPI is 19 points up.
Currencies
The Australian dollar rose slightly in overnight trading, but remained below the 91 US-cent level after RBA governor Glenn Stevens' comments that the Australian economy would probably get a lower exchange rate if it needed it. At 7:20AM the Aussie was buying $US90.85 cents, 59.49 Pence Sterling, 90.81 Yen and 69.85 Euro cents.
Company news
An iiNet Limited
(ASX:IIN) senior executive has criticised NBN Co, warning that the telecommunications industry may abandon NBN Co unless it lowers wholesale prices and changes its attitude. Media reports say the telco's chief regulatory officer, Steve Dalby as saying NBN Co is treating the telecommunications industry with contempt and has been unwelcoming of advice. Shares in iiNet lifted 1.96 per cent yesterday to $6.25.
National Australia Bank Limited
(ASX:NAB) NAB is pursuing Goldman Sachs for $US230 million in damages, for losses it incurred on toxic mortgage assets, according to media reports. The claim dates back to deals made prior to the global financial crisis, when NAB claims Goldman Sachs committed wrongdoing in relation to the sale of collateralised debt obligations that later collapsed. Shares in NAB dropped 1.85 per cent yesterday to close at $28.72.
Commodities
Gold is up $8.50 to $US1,252 an ounce for the August contract on Comex. Silver is up $0.39 to $19.70 for September. Copper is up $0.03 at $3.77 a pound. Oil prices have settled above $US100 a barrel for the first time in more than a year, boosted by concerns over Egypt and a large decline in US crude stockpiles. Oil is up $1.64 at US$101.24 a barrel for August light crude in New York.
