The Australian share market is set to tumble at the open, led by US stocks which closed in the red after congressional politicians announced a bipartisan budget deal that could avert another US government shutdown.
Investors worry the deal removes a key obstacle to the US Federal Reserve reducing economic stimulus. With the political risk reduced, analysts believe the Fed is more likely to taper stimulus sooner rather than later.
Currencies
The Australian dollar dropped amid growing expectations that the US Federal Reserve may begin to taper as early as next week. At 8:20AM the Aussie was buying $US90.6 cents, 55.33 Pence Sterling, 92.77 Yen and 65.72 Euro cents.
Figures
Wall Street took a hit in overnight trade: The Dow Jones Industrial Average lost 130 points to close at 15,844, the S&P 500 dropped 20 points to close at 1,782 and the NASDAQ sank by 57 points to close at 4,004.
European markets followed suit: London’s FTSE fell by 16 points, Paris lost 4 points and Frankfurt slipped by 37 points.
Asian markets were deep in negative territory. China’s stocks fell, dragging the benchmark index to its biggest loss in a month, as coal producers retreated and investors speculated the government may cut growth targets at an economic policy meeting this week: Tokyo’s Nikkei fell by 96 points, Hong Kong’s Hang Seng dropped 406 points, and China’s Shanghai Composite lost 33 points.
The Australian share market widened losses throughout the day to end 0.8 per cent down. The S&P/ASX 200 index fell 39 points to finish at 5,104. On the futures market the SPI is 26 points lower.
Economic news
The Australian Bureau of Statistics will release the rate of unemployment today. Economists are expecting the rate to lift slightly to 5.8 per cent.
Company news
Fortescue Metals Group Limited
(ASX:FMG) is thinking about boosting its indigenous workforce by picking up sacked Rio Tinto workers from the recently closed Gove refinery in the Northern Territory. But the company says it will focus on employing indigenous people in the Pilbara before flying in workers from the Northern Territory, Queensland or NSW. Shares in Fortescue Metals lifted over half a per cent (0.53 per cent) to close at $5.60.
Seven West Media’s Limited
(ASX:SWM) Yahoo!7 has poached the two leading sales executives at Fairfax Media Limited
(ASX:FXJ), according to media reports. Ed Harrison, Fairfax's group sales director, has reportedly been recruited to the role of chief executive of Yahoo!7, while Paul Sigaloff, Fairfax’s general manager of digital and national sales, will likely join him in the top sales position at the site. Shares in Seven West fell 1.86 per cent yesterday to close at $2.11.
Commodities
Gold is down $3.90 to $US1,257 an ounce for the February contract on Comex. Silver is up $0.04 to $20.36 for March. Copper is up $0.03 at $3.30 a pound. Oil is down $1.07 at US$97.44 a barrel for January light crude in New York.
