The Australian share market is set for a relatively flat open, after a subdued session on Wall Street amid ongoing investor nerves the US Federal Reserve may be about to begin withdrawing stimulus.
The concerns were heightened by strong new-home sales, an improved private sector employment report and record exports from the US. However investors also had to weigh this against news of limited growth in the eurozone and signs of slowing growth in the US non-manufacturing sector.
US economic news
Meantime, the US Federal Reserve’s Beige Book revealed economic growth remained moderate to modest from early October through mid-November.
US private-sector hiring surged to 215,000 new jobs created in November, beating expectations.
Also, the US foreign trade deficit narrowed to $US40.6 billion in October on a strong rise in exports.
Currencies
The Australian dollar fell against a stronger greenback after that surprisingly solid US private employment report.At 8:20AM the Aussie was buying $US90.35 cents, 55.16 Pence Sterling, 92.36 Yen and 66.48 Euro cents.
Figures
Wall Street mostly dipped: The Dow Jones Industrial Average lost 25 points to close at 15,890, the S&P 500 fell 2 points to close at 1,793 and the NASDAQ added a point to close at 4,038.
European markets fell further in to negative territory after the latest GDP data showed the eurozone recovery is losing steam, with France possibly heading back into recession. London’s FTSE lost 22 points, Paris dropped 24 points and Frankfurt fell by 83 points.
Asian stocks mostly tanked on concerns about the US Federal Reserve pulling back on stimulus: Tokyo’s Nikkei plunged 342 points, Hong Kong’s Hang Seng sank by 182 points, and China’s Shanghai Composite added 29 points.
The Australian share market ended a three day losing streak to finish 0.3 per cent stronger yesterday, with Energy stocks, the big banks and the big miners all recording gains. The S&P/ASX 200 index closed 18 points up to finish at 5,274. On the futures market the SPI is 5 points up.
Economic news
The Australian Bureau of Statistics will release the October trade balance data today.
Company news
News Corp Australia
(ASX:NWS) boss Julian Clarke says newspaper journalism is not a growth industry in the near term, but may improve when newspapers establish a stronger presence on digital platforms. He says the newspaper sector is still going through a period of settling things down as they transformed their operations into multi-platform businesses embracing both print and digital media. Shares in News Corp dropped 0.41 per cent yesterday to close at $19.23.
Santos Limited
(ASX:STO) says gas prices in eastern Australia will rise more than 40 per cent over the next few years, reaching more than $8 a gigajoule. At the same time, it says it plans to bring its controversial Narrabri gas project on stream in 2017. Santos shares lifted about three-quarters of a per cent (0.77 per cent) yesterday to close at $14.41.
Ex-dividend Asian American Medical Group Limited
(ASX:AJJ)
Commodities
Gold is up $26.40 to $US1,247 an ounce for the February contract on Comex. Silver is up $0.76 to $19.83 for March. Copper is up $0.08 at $3.25 a pound. Oil is up $1.16 at US$97.20 a barrel for January light crude in New York.
