The Australian share market is set to lose traction today, on weak leads from the US where political wrangling over a possible budget deal looks set to continue until the eleventh hour.
Traders say volume was relatively light on Wall Street as investors hung back and watched for political developments.
Friday local time is the deadline set by the US Treasury Department to raise the federal borrowing limit.
Currencies
The Australian dollar pulled back from its four-month high in early trade as optimism about a resolution to the US budget crisis wanes. At 8:20AM the Aussie was buying $US95.32 cents, 59.62 Pence Sterling, 93.66 Yen and 70.5 Euro cents.
Figures
Wall Street fell in to the red: The Dow Jones Industrial Average lost 133 points to close at 15,168, the S&P 500 fell 12 points to close at 1,698 and the NASDAQ dropped 21 points to close at 3,794.
European stocks saw strong gains. Germany's DAX index rose 0.9 per cent to close at a record high, boosted by upbeat data revealing a rise in economic expectations. London’s FTSE added 41 points, Paris gained 33 points and Frankfurt lifted by 81 points.
Asian markets were mostly higher: Tokyo’s Nikkei added 37 points, Hong Kong’s Hang Seng lifted by 118 points, and China’s Shanghai Composite lost 4 points.
The Australian share market rocketed up to close nearly a per cent higher yesterday, on investor confidence of a US political breakthrough in the debt ceiling debate. The S&P/ASX 200 index was 51 points up to close at 5,259. On the futures market the SPI is 16 points down.
Economic news
Westpac-Melbourne Institute will release its Leading Indexes of Economic Activity today.
Company news
BHP Billiton Limited
(ASX:BHP) expects a strong steel production outlook to continue to underpin iron ore demand. Speaking at the Macquarie Western Australia Forum ahead of the global miner’s September quarter production report, BHP’s iron ore president Jimmy Wilson said although Chinese steel demand growth rates have eased, they remain strong in absolute terms. Shares in BHP Billiton closed 0.97 per cent higher yesterday at $35.40.
Telstra Corporation Limited
(ASX:TLS) chief executive David Thodey has defended the company’s decision of off-shoring contact centre jobs at the telco’s annual general meeting, saying customers are increasingly communicating with Telstra via internet. Mr Thodey addressed shareholder concerns about the decline in number of contact centre jobs in the past year, including 648 jobs at Yellow Page directories. Shares in Telstra lifted 1.42 per cent yesterday to close at $5.
Ex-dividend today New Hope Corporation Limited
(ASX:NHC) will pay 5 cents per share fully franked.
Commodities
Gold is down $3.40 to $US1,273 an ounce for the December contract on Comex. Silver is down $0.16 to $21.19 for December. Copper is up $0.01 at $3.31 a pound. Oil is down $1.20 at US$101.21 a barrel for November light crude in New York.
