The Australian share market is tipped to climb higher in early trade, after US stocks lifted despite a political deadlock which has forced the first US Government shut-down in 17 years.
Global stocks gained ground despite Congress’ failure to ensure the government is fully funded to start the new fiscal year.
Traders say markets anticipated the political gridlock, with many expecting the shut-down will be short-lived.
US economic news
Investors looked past the turmoil to see a surprise pick-up in US manufacturing activity. The manufacturing purchasing managers' index stood at its highest reading so far this year, rising to 56.2 in September, from 55.7 in August.
The Commerce Department didn't release its scheduled report on construction spending, the first economic data to be affected by the government's partial shut-down
Figures
There was green on the screen at Wall Street: The Dow Jones Industrial Average gained 62 points to close at 15,192, the S&P 500 added 13 points to close at 1,695 and the NASDAQ dropped 47 points to close at 3,818.
European markets were mostly higher as data showing a mild economic improvement across the eurozone was offset by uncertainty surrounding the US government shutdown: London’s FTSE lost 2 points, Paris lifted by 53 points and Frankfurt added 95 points.
Asian markets were subdued, but Japan's Nikkei Stock Average rose 0.2 per cent after the Bank of Japan's tankan survey showed business sentiment improved for a third straight quarter.
Tokyo’s Nikkei added 29 points, Hong Kong’s Hang Seng and China’s Shanghai Composite was closed for a week-long holiday.
The Australian share market slipped into negative territory yesterday, closing 0.2 per cent down amid investor caution as a US budget stalemate forced a government shut-down. The S&P/ASX 200 index closed 12 points down to finish at 5,207. On the futures market the SPI is 23 points up.
Currencies
The Australian dollar fell from the one-week high it reached yesterday after the RBA left the cash rate on hold and gave a more upbeat assessment on the local economy. At 7:20AM the Aussie was buying $US94.01 cents, 58.07 Pence Sterling, 92.11 Yen and 69.52 Euro cents.
Economic news
The Australian Bureau of Statistics is due to release international trade in goods and services as well as building approvals figures, both for August.
Company news
Paladin Energy Limited
(ASX:PDN) managing Director John Borshoff’s pay packet halved to $2.5 million in fiscal 2013 after the uranium miner doubled its full year loss. Mr Borshoff's pay, including bonuses, was down from $5.2 million in the previous year, Paladin's annual report shows. Shares in paladin dropped 1.03 per cent yesterday to close at 48 cents.
Fairfax Media Limited
(ASX:FXJ) will cut 45 jobs through the merger of business reporting across three newspapers and the closure of glossy magazine inserts. The company is seeking voluntary redundancies from 25 business media staff and 20 employees from the News Media and Life Media magazine section. Shares in Fairfax lifted 1.87 per cent yesterday to close at 54.5 cents.
Ex-dividend
Commodities
Gold tumbled on news of the US Government shut-down. The precious metal fell $40.90 to $US1,286 an ounce for the December contract on Comex. Silver is down $0.53 to $21.18 for December. Copper is down $0.05 at $3.27 a pound. Oil is down $0.29 at US$102.04 a barrel for November light crude in New York.
