The Australian share market is tipped to inch higher this morning after US stocks climbed on a number of upbeat quarterly results from blue-chip companies and an optimistic read on China’s economy.
China economic news
Wall Street followed global markets higher after Chinese manufacturing data showed the world's second-largest economy will likely reach the government's 7.5 per cent growth target for the year. HSBC's preliminary China Manufacturing Purchasing Managers' Index for October rose to a seven-month high of 50.9 from September's final reading of 50.2. Levels above 50 indicate expansion.
European economic news
But the picture wasn’t so bright in Europe. The French purchasing managers' index showed that manufacturing activity fell in October. In Germany, the manufacturing sector managed to remain relatively firm but service sector activity grew at a much slower rate. Markit's euro-zone Composite Purchasing Managers Index fell in September from the prior month. That was against expectations of a slight increase.
Currencies
That European data was a key factor in pushing the Australian dollar lower this morning. At 8:20AM the Aussie was buying $US96.2 cents, 59.39 Pence Sterling, 93.6 Yen and 69.72 Euro cents.
Figures
There was green on the screen at Wall Street: The Dow Jones Industrial Average jumped 96 points to close at 15,509, the S&P 500 added 6 points to close at 1,752 and the NASDAQ lifted 22 points to close at 3,929.
European markets shrugged off local data, driven higher on that positive economic news from China: London’s FTSE gained 39 points, Paris lifted by 15 points and Frankfurt surged 61 points ahead.
Asian markets were mixed. China's Shanghai Composite shed 0.9 per cent as another rise in the interbank lending rate revived fears of the liquidity crunch that rocked the markets in June: Tokyo’s Nikkei added 60 points, Hong Kong’s Hang Seng dropped 164 points, and China’s Shanghai Composite lost 19 points.
The Australian share market closed 0.3 per cent stronger yesterday, led by strong gains among health stocks. The S&P/ASX 200 index closed 17 points up to finish at 5,373. On the futures market the SPI is 8 points higher.
Company news
Transfield Services Limited
(ASX:TSE) will hold its AGM in Sydney today. The meeting comes just days after the company sold its stake in its Transfield Worley New Zealand joint venture to partner Worleyparsons Limited
(ASX:WOR) for $30 million. Shares in Transfield Services lifted 5 per cent yesterday to close at $1.47.
BHP Billiton Limited
(ASX:BHP) is adopting a wait and see approach to developing its Canadian potash project with a view to getting the timing of the project right. The global miner gave the go-ahead earlier this year to invest $US2.6 billion in its Jansen potash project but refrained from giving a timeline for when the project will start production. Shares in BHP dropped 0.4 per cent yesterday to close at $37.35.
Ex-dividend Clover Corporation Limited
(ASX:CLV) will pay 1.5 cents per share fully franked.
Commodities
Gold is up $16.30 to $US1,350 an ounce for the December contract on Comex. Silver is up $0.20 to $22.82 for December. Copper is down $0.01 at $3.26 a pound. Oil is up $0.25 at US$97.11 a barrel for November light crude in New York.
