The Australian market is set to open in positive territory today, after Wall Street pulled back from its euphoric gains made in the previous session as investors digested the US Federal Reserve’s decision to begin tapering measures.
United States stocks closed mostly lower a day after that record-setting rally, however the Dow Jones Industrial Average did hit a fresh closing high in overnight trade.
Currencies
The Australian dollar is licking its wounds as the currency consolidates following yesterday’s plunge in the wake of the Fed meeting.At 8:20AM the Aussie was buying $US88.56 cents, 54.11 Pence Sterling, 92.33 Yen and 64.86 Euro cents.
Figures
Wall Street was mixed: The Dow Jones Industrial Average added 11 points to close at 16,179, the S&P 500 lost 1 point to close at 1,810 and the NASDAQ dropped 12 points to close at 4,058.
European investors cheered the US Fed’s move to taper, with markets surging: London’s FTSE lifted by 93 points, Paris gained 68 points and Frankfurt soared by 154 points.
Asian markets swung wildly: Tokyo’s Nikkei added 271 points, Hong Kong’s Hang Seng shed 255 points, and China’s Shanghai Composite dropped 20 points.
The Australian share market soared more than 2 per cent to session highs after the US Federal Reserve announced it will start to taper its economic stimulus program early next year. The S&P/ASX 200 index rallied 106 points to finish at 5,202. On the futures market the SPI is 11 points higher.
Company news
Incitec Pivot Limited
(ASX:IPL) has signed a new gas supply agreement for its Phosphate Hill fertiliser manufacturing plant near Mount Isa in Queensland that will send its manufacturing costs soaring by $50 million annually for the 2015 and 2016 calendar years. The gas price spike, caused by strong Asian demand for the gas, is likely to hit Phosphate Hill's current earnings capability, which is already under pressure from weak fertiliser prices, operational issues, and a weaker but still comparatively strong dollar. Shares in Incitec Pivot jumped 3.64 per cent yesterday to close at $2.56.
Elders Limited
(ASX:ELD) plans to cut boardroom pay as it looks to rebuild the board to suit its new purpose as a focused rural services business.Chairman Mark Allison told shareholders at the company’s annual meeting that it would seek to cut the directors fee pool from $1.8 million shared between nine directors to a level that is aligned with the current business requirements. Shares in Elders remained steady yesterday at 11 cents.
Commodities
The price of gold has slumped to its lowest level in more than three years, after the US Federal Reserve pulled back on its stimulus program. Gold is down $41.40 to $US1,193 an ounce for the February contract on Comex. Silver is down $0.87 to $19.19 for March. Copper is down $0.02 at $3.30 a pound. Oil is up $0.97 at US$98.77 a barrel for January light crude in New York.
