The Australian share market will begin the day in positive territory, after US stocks were near unchanged and ahead of the all-important RBA cash rate announcement this afternoon. Wall Street pared earlier gains made on the back of upbeat data out of Europe and China as investors weighed sluggish factory-orders data. But local trade is expected to be light as investors turn their attention from the market to the Melbourne Cup.
The race that stops the nation won’t stop the RBA from unveiling its interest rate decision for November at 2.30pm AEST. At its last two meetings the central bank has held the official cash rate at a record low of 2.5 per cent. Economists are widely tipping no change to the central bank’s current stance. In addition, the Australian Industry Group will unveil its performance of services index for October.
Figures
Wall Street ticked higher after factory orders for September increased 1.7 per cent on the month: The Dow Jones Industrial Average gained 24 points to close at 15,639, the S&P 500 added 6 points to close at 1,768 and the NASDAQ lifted 15 points to close at 3,937.
European stocks were broadly higher, with the Stoxx Europe 600 climbing 0.3 per cent to the highest close since May 2008. Data provider Markit said its euro-zone manufacturing purchasing managers index for October edged up to 51.3. London’s FTSE jumped 29 points, Paris added 15 points and Frankfurt gained 29 points.
China's Shanghai Composite inched up less than 0.1 per cent, as strong non-manufacturing data were offset by nerves ahead of a key Communist Party meeting starting later this week, in which leaders will draft economic-overhaul plans. Japanese markets were closed for a holiday. Hong Kong’s Hang Seng lost 60 points, and China’s Shanghai Composite was flat.
The Australian share market took a mid afternoon dive to finish yesterday’s session 0.4 per cent lower. The S&P/ASX 200 index closed 21 points down to close at 5,391. On the futures market the SPI is 18 points higher.
The Australian dollar
The Australian dollar rallied above 95 US cents after strong retail sales and house prices data yesterday. At 8:30AM the Aussie was buying $US95.12 cents, 59.58 Pence Sterling, 93.83 Yen and 70.42 Euro cents.
Company news
Bega Cheese Limited
(ASX:BGA) is now the frontrunner in the three-way takeover battle for Warrnambool Cheese & Butter Factory Co
(ASX:WCB). Shares in the NSW cheese maker surged yesterday, valuing Bega’s takeover offer for Warrnambool, 1.2 Bega shares plus $2 cash, at $8.06. That is six cents above Saputo Inc’s $8 cash takeover offer and 56 cents above Murray Goulburn Co-operative Ltd’s $7.50 offer. Shares in Bega Cheese jumped 4.55 per cent yesterday to close at $5.05.
Westpac Banking Corp
(ASX:WBC) chief Gail Kelly has vowed to grow in the lucrative mortgage market, after the bank revealed a bumper $7.1 billion cash profit yesterday. Ms Kelly also called on the government's coming inquiry into the financial system to assess the cumulative impact of regulation since the global financial crisis. Shares in Westpac fell 1.21 per cent yesterday to close at $34.16.
Commodities
Gold is up $1.50 to $US1,315 an ounce for the December contract on Comex. Silver is down $0.14 to $21.70 for December. Copper is down $0.05 at $3.26 a pound. Oil is up $0.01 at US$94.62 a barrel for December light crude in New York.
