The Australian share market is likely to slip in early trade as the protracted US political gridlock and partial government shut-down sent shudders through global markets overnight.
While investors are frustrated by the political stoush that caused the shut-down, traders say they are more concerned about the possibility the US will hit the debt ceiling and default.
Moves across financial markets were relatively constrained however amid underlying optimism that a worst-case scenario can be avoided.
US economic news
Consumer credit rose by $13.63 billion in August, slightly above expectations.
Currencies
The Australian dollar traded sideways amid contagious worries about the looming US debt ceiling deadline. At 8:20AM the Aussie was buying $US94.28 cents, 58.6 Pence Sterling, 91.23 Yen and 69.45 Euro cents.
Figures
Wall Street was in negative territory: The Dow Jones Industrial Average lost 136 points to close at 14,936, the S&P 500 shed 14 points to close at 1,676 and the NASDAQ fell by 37 points to close at 3,770.
European markets followed suit: London’s FTSE lost 17 points, Paris gained 1 point and Frankfurt dropped 31 points.
Asian markets also fell. Japan's Nikkei Stock Average shed 1.2 per cent after falling five per cent last week: Tokyo’s Nikkei lost 171 points, Hong Kong’s Hang Seng shed 165 points, and China’s Shanghai Composite remained closed for a week-long holiday.
The Australian share market sank almost 1 per cent yesterday amid uncertainty surrounding next week’s US debt ceiling deadline. The S&P/ASX 200 index fell 47 points yesterday, ending the session at 5,161. On the futures market the SPI is 20 points down.
Economic news
NAB will release its Business Confidence and Business Conditions reports for September.
Company news
ASX Limited
(ASX:ASX) has launched a new bookbuilding facility which it says will broaden the number and range of investors who can participate in the process. Currently, participation in bookbuilds is through invitation and is limited to selected investors, usually major shareholders. Under the ASX BookBuild facility, a wider market of potential buyers is available. Shares in the ASX fell 0.84 per cent yesterday to close at $34.16.
Telstra Corporation Limited
(ASX:TLS) has added 3.4 million 4G devices since it launched the network two years ago. The telco says it has experienced a 23 per cent increase in demand for data every month, as more and more 3G customers switch to the super-fast 4G network. Shares in Telstra dipped 0.61 per cent per cent yesterday to close at $4.92.
Ex-dividend
Commodities
Gold prices climbed as jitters over the continued US budget stalemate sent investors flocking to the safe haven asset. Gold is up $15.20 to $US1,325 an ounce for the December contract on Comex. Silver is up $0.63 to $22.39 for December. Copper is flat at $3.30 a pound. Oil is down $0.81 at US$103.03 a barrel for November light crude in New York.
