The Australian share market is tipped to dive in early trade, after US stocks declined amid investor concern that stronger-than-expected US growth might mean the Federal Reserve will begin to taper soon.
US economic news
Investors had a lot of US economic data to digest. The first read on third-quarter US gross domestic product showed growth of 2.8 per cent, up from 2.5 per cent in the second quarter and well above expectations of 2 per cent.
The price index for personal consumer expenditures--the Fed's preferred gauge for inflation--grew 1.9 per cent versus forecasts of a 1.6 per cent rise.
And initial claims for jobless benefits totalled 336,000 last week, down from a revised 345,000 the week before.
Currencies
The Australian dollar has fallen against a strong greenback boosted by better-than-expected US economic data. At 8:20AM the Aussie was buying $US94.61 cents, 58.85 Pence Sterling, 92.73 Yen and 70.51 Euro cents.
Figures
Wall Street was in negative territory: The Dow Jones Industrial Average plunged 153 points to close at 15,594, the S&P 500 lost 23 points to close at 1,747 and the NASDAQ dropped 75 points to close at 3,857.
European markets initially rallied after the ECB cut its benchmark interest rate to 0.25 per cent from 0.5 per cent but then erased those gains amid concerns the recovery in Europe may be fading. London’s FTSE lost 44 points, Paris fell 6 points and Frankfurt added 40 points.
Asian markets were broadly lower, with Japan's Nikkei Stock Average shedding 0.8 per cent, weighed down by disappointing results from Toyota Motor. Tokyo’s Nikkei slipped 109 points, Hong Kong’s Hang Seng lost 156 points, and China’s Shanghai Composite dropped 10 points.
The Australian share market spent yesterday’s session in the red, closing 0.2 per cent down, after a soft read on the local jobs market. The S&P/ASX 200 index closed 12 points down to 5,422. On the futures market the SPI is 30 points lower.
Economic news
The RBA will today release its quarterly monetary policy statement.
Company news
Commonwealth Bank of Australia
(ASX:CBA) will hold its annual general meeting in Sydney today. The update comes hot on the heels of the bank’s announcement its first quarter cash earnings swelled by 14 per cent, putting it on track for a record $8 billion annual profit. Shares in CBA continued to soar yesterday – they closed 1.74 per cent higher at $79.32.
Echo Entertainment Group Limited
(ASX:EGP) is also holding its annual general meeting in Sydney today. The company is expected to reveal plans for a redevelopment worth hundreds of millions of dollars at Jupiters Hotel and Casino on the Gold Coast. Shares in Echo fell 1.16 per cent yesterday to close at $2.55.
Ex-dividend Westpac Banking Corp
(ASX:WBC) will pay 88 cents per share fully franked plus a special dividend of 10 cents per share fully franked.
Commodities
Gold is down $9.30 to $US1,308.50 an ounce for the December contract on Comex. Silver is down $0.11 to $21.66 for December. Copper is up $0.01 at $3.25 a pound. Oil is down $0.60 at US$94.20 a barrel for December light crude in New York.
