The Australian share market is expected to open in positive territory ahead of today’s all-important RBA cash rate decision and following on from strong leads from Europe, while Wall Street was closed for a public holiday.
European investors were cheered by news that the euro zone's return to economic growth has spread to the weaker southern countries. Manufacturing activity hit a 26-month high in August, confirming other recent data that suggests the bloc is coming out of a deep recession.
European economic news
The Purchasing Managers' Index jumped to 51.4 points in August from 50.3 in July, pushing further beyond the 50-points boom-or-bust line.
Economic news
But its local economic data that is likely to impact our market today, with all eyes on that RBA announcement at 2.30pm Australian Eastern Standard Time.
Most economists believe the central bank will keep the cash rate at the record low of 2.5 per cent when it meets later today.
In other economic news, the Australian Bureau of Statistics will release is retail trade data for July as well as the balance of payments and international investment position for the June quarter.
Currencies
The RBA’s decision is likely to impact the Australian dollar, which stayed in a tight range overnight. At 7:20AM the Aussie was buying $US89.85 cents, 57.85 Pence Sterling, 89.28 Yen and 68.12 Euro cents.
Figures
Wall Street was closed for the Labour Day holiday.
European markets rallied: London’s FTSE jumped 93 points, Paris lifted by 72 points and Frankfurt surged 141 points.
Asian markets followed suit: Tokyo’s Nikkei added 184 points, Hong Kong’s Hang Seng soared by 444 points, and China’s Shanghai Composite was flat.
The Australian share market closed sharply higher yesterday after a day spent in positive territory, bolstered by strong data out of China and a solid deluge of local economic data. The S&P/ASX 200 index closed 53 points up to finish at 5,188. On the futures market the SPI is 24 points higher.
Company news
AMP’s Limited
(ASX:AMP) AMP Capital and China's biggest insurer China Life will establish a new funds management company in China. AMP will hold a 15 per cent stake in the new China Life AMP Asset Management Company, with the balance to be held by China Life Asset Management Company, a subsidiary of China Life Insurance Company. Shares in AMP dropped 1.05 per cent yesterday to close at $4.69.
Etihad Airways has lifted its stake in Virgin Australia Holdings Limited
(ASX:VAH) by at least 1.4 per cent, according to media reports. The Abu Dhabi-based airline reportedly bought $14.5 million worth of Virgin shares for 39.5 cents a share in an on-market purchase. Shares in Virgin soared 3.85 per cent yesterday to close at 40.5 cents.
Ex-dividend
Warrnambool Cheese & Butter Factory Co
(ASX:WCB)
Commodities
Gold is down $16.80 to $US1,396 an ounce for the December contract on Comex. Silver is down $0.63 to $23.51 for December. Copper is down $0.03 at $3.23 a pound. Oil is down $1.15 at US$107.65 a barrel for October light crude in New York.
