The Australian share market is expected to pause for breath in early trade following a pull-back on Wall Street as US investors engaged in some profit-taking one day after the Federal Reserve announced it would continue its open-ended economic stimulus efforts.
With the Fed’s message that the US economy isn’t strong enough to stand on its own, investors turned their focus to the latest economic data.
US economic news
Initial jobless claims rose to 309,000, from an upwardly revised 294,000 in the previous week. That was well below expectations.
In other data, sales of previously owned homes rose unexpectedly in August to the highest level since 2007.
Figures
Wall Street fell from the previous day’s jubilant highs: The Dow Jones Industrial Average lost 40 points to close at 15,637, the S&P 500 fell 3 points to close at 1,722 and the NASDAQ lifted 6 points to close at 3,789.
European markets rallied as they digested the news from the US Fed: London’s FTSE added 67 points, Paris gained 36 points and Frankfurt jumped by 58 points.
Asian markets also soared: Tokyo’s Nikkei added 261 points, Hong Kong’s Hang Seng lifted by 385 points, and China’s Shanghai Composite gained 6 points.
The Australian share market surged more than 1 per cent yesterday after the US Central Bank opted to maintain its economic stimulus program. The S&P/ASX 200 index gained 57 points to finish at 5,296. On the futures market the SPI is 14 points lower.
Currencies
The Australian dollar dropped lower as the dust settles on that news from the US Fed. At 7:20AM the Aussie was buying $US94.4 cents, 58.89 Pence Sterling, 93.89 Yen and 69.76 Euro cents.
Company news
AGL Energy Limited
(ASX:AGK) will take full over ownership of Australian Power and Gas Company Limited
(ASX:APK).
The energy player says it’s acquired more than 90 per cent interest in APG's issued shares and options. Shares in AGL dropped 0.32 per cent yesterday to close at $15.52.
Wesfarmers Limited
(ASX:WES) has seen a bounce in sales since the federal election, signaling a recovery in the household sector. Chief executive Richard Goyder told media trading conditions have improved with more certainty around government. Shares in Wesfarmers slipped 0.34 per cent to $41.40.
Ex-dividend
Commodities
Gold is up $61.70 to $US1,369 an ounce for the December contract on Comex. Silver is up $1.72 to $23.29 for December. Copper is up $0.07 at $3.35 a pound. Oil is down $1.68 at US$106.39 a barrel for October light crude in New York.
