The Australian share market is set for a relatively flat open after US stocks pulled back from their recent gains amid mixed company reports and weakness in global markets.
European stocks retreated from recent multi-year highs, and the banking sector weighed on benchmarks after the announcement of stress tests.
Meantime, a rise in the yen and a jump in Chinese interbank lending rates sparked declines in Asian stock markets, driving a negative tone for the Wall Street session.
Figures
The Dow Jones Industrial Average lost 54 points to close at 15,413, the S&P 500 shed 8 points to close at 1,746 and the NASDAQ dropped 23 points to close at 3,907.
European markets fell across the board after the ECB announced that it would begin a thorough review of around 130 of the euro zone's largest banks. London’s FTSE dropped 21 points, Paris lost 35 points and Frankfurt dropped 28 points.
Asian markets were also in negative territory as China’s biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what some see as a fresh wave of defaults.Tokyo’s Nikkei plunged by 287 points, Hong Kong’s Hang Seng lost 316 points, and China’s Shanghai Composite fell 28 points.
The Australian share market plunged in afternoon trade yesterday, amid investor fears over news Chinese banks have seen bad loans triple. The S&P/ASX 200 index closed 17 points down to finish at 5,356. On the futures market the SPI is 4 points higher.
Currencies
The Australian dollar is trading lower this morning on those concerns about an apparent increase in bad debt in China. At 8:20AM the Aussie was buying $US96.19 cents, 59.52 Pence Sterling, 93.63 Yen and 69.83 Euro cents.
Company news
Newcrest Mining Limited
(ASX:NCM) will hold its annual general meeting in Melbourne today, just weeks after the company bowed to investor pressure and promised to find a new Chairman and CEO within the next year. Shareholders will no doubt have questions as the company finds its way through tough times and multiple gold production downgrades. Shares in Newcrest lifted 3.55 per cent yesterday to close at $11.09.
Echo Entertainment Group Limited
(ASX:EGP) plans to sell its Townsville Casino for an estimated $75 million according to media reports. Echo chief executive officer John Redmond says the group is ready to start a $1.5 billion upgrade of its Brisbane and Gold Coast casinos if given state government approval. Shares in Echo fell 0.75 per cent yesterday to close at $2.64.
Commodities
Gold is down $8.60 to $US1,334 an ounce for the December contract on Comex. Silver is down $0.17 to $22.62 for December. Copper is down $0.07 at $3.27 a pound. Oil is down $1.44 at US$96.86 a barrel for November light crude in New York.
