The Australian share market is set to slip in to negative territory today after US stocks closed moderately lower as investors remained cautious amid concerns the Federal Reserve may review its stimulus measures sooner than expected.
The subdued trading was seen as a sign of profit taking in the wake of a strong run-up in stock prices over recent months.
Investors are also wary about a reduction in US stimulus, which could be seen as early as next week.
China economic news
In global economic news, China was front and centre. China's industrial output rose 10 per cent in November on-year, while retail sales increased 13.7 per cent in November from the previous year.
Currencies
The Australian dollar is higher on the back of that strong economic data out of China and US dollar weakness. At 8:40AM the Aussie was buying $US91.5 cents, 55.66 Pence Sterling, 94.08 Yen and 66.51 Euro cents.
Figures
Wall Street dropped: The Dow Jones Industrial Average lost 52 points to close at 15,973, the S&P 500 slipped by 6 points to close at 1,803 and the NASDAQ fell by 8 points to close at 4,060.
European markets followed suit: London’s FTSE lost 36 points, Paris dropped 43 points and Frankfurt sank by 81 points.
Asian markets were also in the red: Tokyo’s Nikkei fell by 39 points, Hong Kong’s Hang Seng slipped by 67 points, and China’s Shanghai Composite lost a point.
The Australian share market gave up its early gains to finish flat yesterday, dragged by losses in the Energy sector, while insurance giant QBE continued its rapid share price descent. The S&P/ASX 200 index closed near a point down to finish at 5,144. On the futures market the SPI is 36 points down.
Economic news
The Westpac-Melbourne Institute will release its consumer confidence index for December today, with economists expecting little change.
Company news
Qantas Airways Limited
(ASX:QAN) executives will meet with unions next Wednesday to discuss the latest round of job cuts, according to media reports. It will be the first time that unions get an opportunity to hear about the business units likely to be hit hardest by cuts announced last week when Qantas issued a profit warning. Shares in Qantas struck a record low yesterday, closing 3.02 per cent down at 96.5 cents in the wake of its shock profit warning and subsequent downgrade to junk status last week.
New Billabong International Limited
(ASX:BBG) chief Neil Fiske has flagged a significant shake-up of the company that will see it shed underperforming retail chains and clothing brands in favour of a smaller portfolio of well-performing businesses. Speaking to shareholders at the company's annual general meeting, Mr Fiske said his strategy could be summed up as "fewer, bigger, better" -- and that will apply equally to businesses, brands, clothing styles, suppliers, marketing programs, IT systems and capital investments. Shares in Billabong bounced up 18.46 per cent yesterday to close at 38.5 cents.
Ex-dividend Ironbark Capital Limited
(ASX:IBC) will pay 1.25 cents per share fully franked.
Commodities
Gold is up $26.90 to $US1,261 an ounce for the February contract on Comex. Silver is up $0.61 to $20.32 for March. Copper is up $0.01 at $3.27 a pound. Oil is up $1.17 at US$98.51 a barrel for January light crude in New York.
