Outlook: ASX set to extend October gains

Market Reports

As we enter the first day of the week and the final days of October the Australian share market looks set to extend a buoyant month of gains and nudge new five-year highs. 
 
On Wall Street the S&P 500 hit a new record on Friday following better than expected earnings reports. US indices continued to climb amid expectations monetary policy will remain loose ahead of a US Federal Reserve meeting mid this week. 
 
With no major local economic news scheduled for release today attention will turn a slew of companies preparing for AGM’s (Annual General Meetings) this week and a handful of earnings and production reports. 
 
US economic news 
 
The US government budget debate and consequent partial government shutdown pushed sentiment down more than expected to the lows of this year. The Thomson Reuters and University of Michigan final October sentiment index dropped to 73.2, from a preliminary read of 75.2 and down from 77.5 the month before. 
 
US orders for durable goods increased last month by the biggest amount since June. The Commerce Department reports orders for durable goods rose 3.7 per cent in September, beating expectations for a 2.5 per cent rise.
 
Figures

On Wall Street the major indices rose around 1 per cent over the week. On Friday the Dow Jones Industrial Average gained 61 points to close at 15,570, the S&P500 advanced 8 points to a new record close of 1,760 and the Nasdaq rose 14 points to close at 3,943.

Across Europe markets closed mixed at the end of last week. London was higher after reporting upbeat third quarter growth figures with the FTSE adding 8 points, Paris dipped 3 points while Frankfurt firmed 5 points, after briefly hitting through the 9,000 level for the first time.

Asian markets fell on Friday, weighed down by Chinese credit fears: Tokyo’s Nikkei lost 398, Hong Kong’s Hang Seng dropped 137 points, and China’s Shanghai Composite fell 31 points.
 
The Australian share market gained 1.2 per cent over last week, posting its third straight weekly gain. The S&P/ASX 200 index added 13 points on Friday, widening the weekly gain of 65 points to finish at 5,386. On the futures market the SPI is 33 points higher. 
 
Currencies 
 
The Australian Dollar at 8:10AM was buying 95.86 US cents, 59.33 Pence Sterling, 93.71 Yen and 69.45 Euro cents.
 
Company news 
 
The Big Four Banks are in focus with ANZ Banking Group’s (ASX:ANZ) earnings due tomorrow, National Australia Bank Limited’s (ASX:NAB) earnings due later in the week and Westpac Banking Corporation (ASX:WBC) next week. Analysts have tipped ANZ will reveal an annual cash profit of $6.4 billion, representing 10 per cent growth from the year before. The bank is also making headlines today amid speculation it has approached Future Fund executive chairman David Gonski to become its next chairman. Shares in ANZ added 0.9 per cent on Friday, ending the week at $32.66. 
 
Rio Tinto Limited (ASX:RIO) has inked a deal to sell its 50.1 per cent stake in the Clermont coal mine in eastern Australia for about $US1 billion to Glencore Xstrata PLC and Japan's Sumitomo Corporation. The global miner says the sale will realise value for shareholders and continue to optimise the company’s portfolio while strengthening its balance sheet. Though the deal is still awaiting approvals Rio Tinto expects to finalise the deal in the first quarter of 2014, which brings the total value of divestments announced or completed this year to $US2.915. Shares in Rio Tinto lost 0.13 per cent on Friday, ending the week at $63.77. 
 
Ex-dividends
 
CTI Logistics (ASX:CLX) paying a 4 cent fully franked dividend
Harvey Norman Holdings Limited (ASX:HVN) paying a 4.5 cent fully franked dividend
ILH Group Limited (ASX:IAW) paying a 0.4 cent fully franked dividend
Sterihealth Limited (ASX:STP) paying a 7 cent fully franked dividend
 
Commodities
 
Gold has risen $2.20 to $US1,353 an ounce for the December contract on Comex. 
Silver has slipped $0.18 to $22.64 for December. 
Copper has eased $0.02 to $3.27 a pound. 
Oil has gained $0.74 to $US97.85 a barrel for December light crude in New York.

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