The Australian share market is set to dip in early trade after US stocks fell following a surprisingly upbeat assessment of the US economy from the Federal Reserve.
Many traders were expecting the Fed to downgrade its economic outlook after the budget deadlock in Washington that caused a partial government shut down this month.
But the Fed maintained its view the US economy remains resilient, which has investors thinking the central bank will pull back on its bond buying program soon.
That said, the Fed made no change to its $US85 billion-a-month stimulus measures in today’s announcement.
Currencies
That news from the US pushed the greenback higher against most of the major currencies, including the Australian dollar which dropped in value. At 8:20AM the Aussie was buying $US94.84 cents, 59.15 Pence Sterling, 93.46 Yen and 69.06 Euro cents.
Figures
Wall Street fell in to negative territory: The Dow Jones Industrial Average dropped 62 points to close at 15,619, the S&P 500 slipped 9 points to close at 1,763 and the NASDAQ lost 22 points to close at 3,931.
European markets were treading water despite business confidence rising in the eurozone: London’s FTSE lifted by 3 points, Paris lost 4 points and Frankfurt dipped by 12 points.
Asian markets rallied ahead of the US Fed outcome this morning: Tokyo’s Nikkei added 176 points, Hong Kong’s Hang Seng soared by 457 points, and China’s Shanghai Composite gained 32 points.
The Australian share market closed 0.3 per cent higher yesterday, as investors held fire ahead of the much-anticipated US Fed announcement. The S&P/ASX 200 index closed 15 points up to finish at 5,431. On the futures market the SPI is 15 points down.
Economic news
HIA will release its new home sales index for September and the Australian Bureau of Statistics will put out its building approvals data for September.
Company news
National Australia Bank Limited
(ASX:NAB) has lifted its full-year cash profit by 9.3 per cent on the back of lower bad debt and stronger earnings across most of its businesses. In the year to September 30, NAB posted a cash profit of $5.94 billion. Shares in NAB closed down 1.23 per cent yesterday to close at $36.23.
Telstra Corporation Limited
(ASX:TLS) has flagged an interest in buying firms in Asia as part of a strategy to compete against US rivals in Asia, according to media reports. The reports say the telco sees expansion-by-acquisition as the ideal path to growing its Asian footprint, especially in cloud computing, video conferencing and internet services markets. Shares in Telstra lifted 0.19 per cent to close at $5.17.
Ex-dividend
Australian Governance Master Index Fund Limited
(ASX:AQF)
Commodities
Gold is down $0.90 to $US1,345 an ounce for the December contract on Comex. Silver is up $0.24 to $23 for December. Copper is up $0.04 at $3.31 a pound. Oil is down $1.49 at US$96.71 a barrel for December light crude in New York.
