The Australian share market is tipped for a flat open, as it looks for direction following a mixed trading day on Wall Street and ahead of the all important local inflation data out today.
US stocks spent the session digesting everything from weak manufacturing data to strong earnings reports and news that China may be considering stimulus policies.
US economic news
Manufacturing activity in the US dropped off in July, with a reading of minus 11 for the month compared to 7 in June.
China economic news
In the meantime, global markets got a boost from the Chinese Premier, who says economic growth must stay above the bottom line of seven per cent. Analysts see the comment as suggesting more economic stimulus may be on the way.
Figures
Wall Street had a topsy turvy day: The Dow Jones Industrial Average gained 22 points to close at 15,568, the S&P 500 lost 3 points to close at 1,692 and the NASDAQ shed 21 points to close at 3,579.
European markets were in negative territory: London’s FTSE lost 26 points, Paris dropped 17 points and Frankfurt was down by 17 points.
Asian investors were cheered by hints there may be stimulus in China: Tokyo’s Nikkei added 120 points, Hong Kong’s Hang Seng jumped 499 points, and China’s Shanghai Composite gained 39 points.
The Australian share market finished 0.3 per cent higher yesterday. The S&P/ASX 200 index closed 15 points up to finish at 5,017.
On the futures market the SPI is just 3 points up.
Currencies
The Australian dollar is pushing toward 93 US cents on healthy gold prices and weakness in the greenback. At 7:20AM the Aussie dollar was buying $US92.95 cents, 60.46 Pence Sterling, 92.45 Yen and 70.3 Euro cents.
Economic news
The Australian Bureau of Statistics will today release the all-important consumer price index for the June quarter. Economists expect the CPI to show an average increase of 0.5 per cent over the June quarter and 2.5 per cent for the year to the June quarter. The data is likely to add to the case for an RBA rate cut in August.
Company news
Australand Property Group
(ASX:ALZ) will release its half year results today. Analysts say the result will be the benchmark for reporting season for impairments in the residential sector. The property group is expected to slightly improve on its result from the same time last year, which came in at $68.2 million. Shares in Australand closed 3.05 per cent lower yesterday at $3.50.
Rio Tinto Limited
(ASX:RIO) is one more step closer to a new iron ore mine in the Pilbara, with public comments now being sought for the proposal. The company is planning to build a 35 million-tonne per annum mine based around its Koodaideri deposits. Shares in Rio Tinto lifted 0.37 per cent yesterday to close at $56.76.
Ex-dividend Capilano Honey Limited
(ASX:CZZ) will pay 15 cents per share fully franked.
Commodities
Gold is down $1.30 to $US1,335 an ounce for the August contract on Comex. Silver is down $0.25 to $20.25 for September. Copper is up $0.01 at $3.20 a pound. Oil is up $0.29 at US$107.23 a barrel for August light crude in New York.
