The Australian share market is expected to recover most of yesterday’s losses after US stocks closed higher as investors continued to digest a strong jobs report and improving prospects for Europe.
The gains came on the heels of Friday's market surge after the Labor Department reported that the US added 195,000 jobs in June, well above predictions.
European economic news
Wall Street was also cheered by gains on European markets, which lifted after Greece's bailout lenders - the European Union, the European Central Bank and the IMF - announced that an audit showed the country’s reform efforts were broadly in line with expectations.
European investors also took heart that high-level resignations in Portugal have passed without bringing down the Government.
Figures
Wall Street closed higher as investors position themselves for earnings season to kick off after the closing bell: The Dow Jones Industrial Average added 89 points to close at 15,225, the S&P 500 rose 9 points to close at 1,640 and the NASDAQ lifted 5 points to close at 3,485.
European markets followed suit: London’s FTSE gained 75 points, Paris added 70 points and Frankfurt soared by 163 points.
But Asian markets fell deeply into the red after the strong US jobs data raised expectations the US Fed will pull back on stimulus measures: Tokyo’s Nikkei dived by 201 points, Hong Kong’s Hang Seng plummeted by 272 points driven by Beijing's plan to cut credit to force consolidation in industries where there was overcapacity., and China’s Shanghai Composite lost 49 points.
The Australian share market closed 0.7 per cent down after being dragged by declining job advertisement figures and yet another slump in the gold price. The S&P/ASX 200 index closed 32 points down to finish at 4,810.
On the futures market the SPI is 26 points higher.
Currencies
The Australian Dollar at 7:15AM was buying $US91.32 cents, 61.1 Pence Sterling, 92.21 Yen and 70.98 Euro cents.
Economic news
The National Australia Bank will release its monthly business survey for June
Company news
Bank of Queensland Limited
(ASX:BOQ) may have its long-term issuer credit rating raised by Standard & Poor’s, which has put the regional bank on positive credit watch. BOQ chief financial officer Anthony Rose says the move has affirmed BOQ’s strategic direction and the progress it has made over the last 18 months. Shares in the Bank of Queensland lifted 0.56 per cent to $8.93.
Rio Tinto’s Limited
(ASX:RIO) West Australian iron ore production has been hit in the June quarter by unseasonal rain and a conveyer outage, raising questions over whether the miner will meet its full-year guidance, according to media reports. Rio's second-quarter Pilbara production, which is due to be reported early next week, is expected to come in below 61 million tonnes as forecast. Shares in Rio dropped 2.01 per cent yesterday to close at $51.64.
Commodities
Gold is up $22.20 to $US1,235 an ounce for the August contract on Comex. Silver is up $0.30 to $19.04 for September. Copper is up $0.04 at $3.10 a pound. Oil is down $0.08 at US$103.14 a barrel for August light crude in New York.
