The Australian share market is expected to continue to spiral in early trade, after US stocks took a hit amid concerns the US Federal Reserve will soon scale back its bond-buying program.
The pullback extended Monday's declines on Wall Street and followed steep drops in Europe overnight.
Analysts attributed the declines to speculation the Fed could scale back its asset-purchase program later this month following better-than-expected data this week on manufacturing activity.
And after eight weeks of gains, it is also likely US investors are taking some of their profits off the table.
US Economic news
Investors are looking Friday's US jobs report for November, which is expected to provide a key sign about whether the economy is strong enough for the stimulus to be reduced.
Currencies
The Australian dollar has moved above 91 US cents as traders took profits on the greenback and prepared for key American employment data. At 8:20AM the Aussie was buying $US91.37 cents, 55.76 Pence Sterling, 93.58 Yen and 67.25 Euro cents.
Figures
Wall Street was in negative territory: The Dow Jones Industrial Average lost 94 points to close at 15,915, the S&P 500 dropped 6 points to close at 1,795 and the NASDAQ slipped by 8 points to close at 4,037.
Europe's major markets mostly fell on news of shrinking manufacturing activity in France and Spain: London’s FTSE lost 63 points, Paris fell by 113 points and Frankfurt plummeted by 179 points.
Asian markets mostly fell but Japanese shares bucked the downward trend as the yen slipped against the dollar. Tokyo’s Nikkei added 95 points, Hong Kong’s Hang Seng lost 128 points, and China’s Shanghai Composite added 15 points.
The Australian share market closed 0.4 per cent lower yesterday as the miners weighed on the market. The S&P/ASX 200 index closed 23 points down to finish at 5,256. On the futures market the SPI is 28 points lower.
Economic news
The Australian Bureau of Statistics will today release September quarter gross domestic product figures, with economists tipping 0.6 per cent growth in the quarter and 2.4 per cent growth for the year.
The AiG performance of services index for November will also be released.
Company news
Beacon Hill Resources
(ASX:BHU) will hold its annual general meeting today. The update comes after the company announced it is progressing towards final commissioning of its rail line at its flagship coal mine in Mozambique. The company also recently announced plans to de-list from the ASX by the year end. Shares in Beacon Hill last traded at 3.3 cents.
Woolworths Limited
(ASX:WOW) and Wesfarmers Limited
(ASX:WES) owned Coles are reportedly close to doing a deal with the ACCC over their petrol shopper docket schemes that could see a cap placed on steep discounting at supermarket-owned petrol stations. The competition watchdog has been working closely with supermarkets and a deal may be announced before Christmas according to media reports. Shares in Woolworths dipped 0.33 per cent yesterday to close at $33.45.
Ex Dividends
Commodities
Gold is down $1.10 to $US1,221 an ounce for the February contract on Comex. Silver is down $0.22 to $19.06 for March. Copper is down $0.02 at $3.17 a pound. Oil is up $2.22 at US$96.04 a barrel for January light crude in New York.
