The Australian share market is expected to fall steeply in early trade after US stocks dropped on investor fears over rising tensions in Syria.
Low volumes exacerbated the effect of the selling, and while most traders were talking about Syria, the sell-off was also due to anxiety over whether the Federal Reserve will begin to scale back its economic stimulus measures next month.
Not helping matters – are concerns on Capitol Hill about the potential for a political fight over raising the US federal debt ceiling.
Figures
Wall Street plunged: The Dow Jones Industrial Average lost 170 points to close at 14,776, the S&P 500 fell 26 points to close at 1,630 and the NASDAQ dropped 79 points to close at 3,579.
European markets slumped as worries about Syria and the US debt ceiling overshadowed upbeat data out of Germany: London’s FTSE lost 51 points, Paris dropped 98 points and Frankfurt plummeted 193 points.
Asian markets were mixed: Tokyo’s Nikkei lost 94 points, Hong Kong’s Hang Seng fell 131 points, and China’s Shanghai Composite added 7 points after data showed profits among industrial firms in July grew 12 per cent compared to June.
The Australian share market finished yesterday’s session slightly ahead, inching higher on strong earnings reports. The S&P/ASX 200 index closed 6 points up to finish at 5,141.
On the futures market the SPI is 55 points down.
Currencies
The Australian Dollar at 7:30AM was buying $US89.86 cents, 57.82 Pence Sterling, 87.2 Yen and 67.13 Euro cents.
Economic news
Australian Bureau of Statistics will release its construction work data for the June quarter today.
Company news
Woolworths Limited
(ASX:WOW) will post its full year earnings report today. It comes after the supermarket giant last month announced a strong lift in sales totaling $58.5 billion. Shares in Woolworths gained 1.01 per cent yesterday to close at $33.91.
Transfield Services Limited
(ASX:TSE) will also reveal its full year results today after lowering its guidance in May amid a slowdown in mining and infrastructure projects. The mining services company says it’s expecting net profit after tax, but before amortisation and impairments to be between $62 and $65 million this financial year. Shares in Transfield fell 3.57 per cent yesterday to close at 81 cents.
Commodities
The escalating tensions over Syria have pushed up oil prices and other safe haven assets such as gold. Gold is up $27.10 to $US1,420 an ounce for the December contract on Comex. Silver is up $0.64 to $24.65 for September. Copper is up $0.01 at $3.33 a pound. Oil jumped $3.09 at US$109.01 a barrel for October light crude in New York.
Ex-dividend
Century Australia Investments Limited
(ASX:CYA)
