Outlook: Aus shares set for modest gains

Market Reports

The Australian share market is likely to make modest gains in early trade, after US stocks jumped on news Microsoft will launch a $40 billion share repurchase plan, sparking investor confidence that more companies may begin to deliver returns to shareholders.
 
Investors are waiting for the outcome of the US Federal Open Market Committee tomorrow morning Australian time, with a news conference by Fed chairman Ben Bernanke expected to reveal a reduction in the central bank’s its $85-billion-a-month bond-buying program.

US economic news
 
US consumer-price index for August rose 0.1 per cent on the month. That was in line with expectations.
 
Figures

Wall Street was in positive territory: The Dow Jones Industrial Average gained 35 points to close at 15,530, the S&P 500 added 7 points to close at 1,705 and the NASDAQ lifted 28 points to close at 3,746.
 
European markets fell as traders banked profits from the previous day's rally, overlooking a positive German survey on investor sentiment to concentrate on developments at the US Federal Reserve. London’s FTSE lost 53 points, Paris dropped 7 points and Frankfurt was down by 16 points.
 
Asian markets were mostly lower, highlighted by a sharp selloff in Chinese stocks ahead of the Mid-Autumn Festival four-day holiday weekend: Tokyo’s Nikkei fell 93 points, Hong Kong’s Hang Seng lost 72 points, and China’s Shanghai Composite dropped 46 points.
 
The Australian share market finished the session flat yesterday, as investors held fire ahead of the US Federal Reserve meeting.The S&P/ASX 200 index closed 3 points up to finish at 5,251. On the futures market the SPI is 6 points higher. 

Currencies
 
The Australian dollar has pushed higher on expectations the US Fed will begin to taper. At 7:20AM the Aussie was buying $US93.56 cents, 58.84 Pence Sterling, 92.76 Yen and 70.06 Euro cents.
 
Economic news

The Westpac Melbourne Institute will release its leading index for economic activity today. 
 
Company news
 
Santos Limited (ASX:STO) has the tick of approval from the NSW Government to drill eight exploration coal seam gas wells as long as strict environmental conditions are met. The company won approval to drill two sets of four wells in the Pilliga Forest in north-west NSW. Shares in Santos fell 0.66 per cent yesterday to close at $15.
 
Equity Trustees Ltd(ASX:EQT) has extended its offer for The Trust Company Limited (ASX:TRU), a week after the takeover target accepted a sweetened bid from Perpetual Limited (ASX:PPT). Equity said its offer provided higher long-term value than rival offers from Perpetual or IOOF Holdings Limited(ASX:IFL) and could result in higher dividends for its shareholders. Shares in Equity Trustees lifted 0.61 per cent to close at $16.50.
 
Ex-dividend
 
IOOF Holdings Limited (ASX:IFL)
Royal Wolf Holdings Limited (ASX:RWH)
 
Commodities

Gold is down $8.40 to $US1,309 an ounce for the December contract on Comex. Silver is down $0.23 to $21.78 for December. Copper is flat at $3.22 a pound. Oil is down $1.17 at US$105.42 a barrel for October light crude in New York.