The Australian share market is set for a soft start as US stocks hovered amid investor uncertainty surrounding Federal Reserve policy and debt ceiling talks.
Analysts warned the Fed’s decision to leave its stimulus policy unchanged for the time being is likely to lead to an intense focus on economic data with markets likely to be filled with emotion and volatility over the coming weeks.
US economic news
The consumer confidence index for September declined to 79.7 from a revised reading of 81.8 in August, just missing expectations.
Meanwhile, a manufacturing index for September was zero, down from 14 in August.
Balancing that out, the S&P Case-Shiller home price index for July rose 12.4 per cent on year, in line with expectations.
Figures
Wall Street mostly dipped: The Dow Jones Industrial Average lost 67 points to close at 15, 335, the S&P 500 dropped 4 points to close at 1,697 and the NASDAQ added 3 points to close at 3,768.
European markets were in positive territory after data showed a pick-up in German business confidence. London’s FTSE gained 14 points, Paris lifted by 24 points and Frankfurt added 29 points.
Asian markets were in the red: Tokyo’s Nikkei lost 10 points as it returned to trade after a bank holiday, Hong Kong’s Hang Seng fell 193 points on profit taking, and China’s Shanghai Composite shed 14 points.
The Australian share market slipped yesterday, weighed down by uncertainty surrounding the US Federal Reserve’s timeline for tapering its economic stimulus program. The S&P/ASX 200 index fell 18 points over the session to finish at 5,234. On the futures market the SPI is 3 points down.
Economic news
The Reserve Bank of Australia will release its financial stability review today.
Company news
Telstra Corporation Limited
(ASX:TLS) and the coalition government have begun talks to renegotiate the $11 billion national broadband network deal the telco signed with the former Labor government, according to media reports. Under the coalition's proposal for a cheaper, but slower, alternative NBN, the government would have to buy Telstra's copper network to build a fibre-to-the-node system. Shares in Telstra fell 0.4 per cent yesterday to close at $4.93.
Fortescue Metals Group Limited
(ASX:FMG) founder Andrew Forrest has spent almost $24 million increasing his majority stake in the iron ore miner. Mr Forrest bought more than 5.2 million Fortescue stocks on the share market between September 17 and 23, for a total price of $23.6 million. That takes his ownership stake to 33 per cent. Shares in Fortescue lifted 2.83 per cent yesterday to close at $4.72.
Ex-dividend
Commodities
Gold is down $10.70 to $US1,316 an ounce for the December contract on Comex. Silver lost $0.27 to $21.59 for December. Copper is down $0.04 at $3.26 a pound. Oil shed $0.46 at US$103.13 a barrel for November light crude in New York.
Currencies
The Australian dollar pushed lower as commodity prices dropped. At 7:20AM the Aussie was buying $US93.91 cents, 58.7 Pence Sterling, 92.77 Yen and 69.72 Euro cents.
