The Australian share market is set for a soft start after Wall Street ended mixed as investors weighed solid earnings reports against expectations the US Federal Reserve will continue to taper economic stimulus next week.
Global economic news
There was little economic news to drive US markets, however the International Monetary Fund offered an improved outlook for the global economy. The IMF says global activity gathered pace during the second half of 2013, and that is expected to improve during the next two years.
US stocks were also initially pushed higher by solid earnings from Johnson & Johnson, Delta Air Lines and Verizon, however sentiment changed amid predictions the US Fed will decide to further reign in its bond-buying program, when it meets next week.
Currencies
The positive corporate earnings reports and expectations the Fed will taper was enough to boost the greenback, with the Australian dollar falling. At 8:30AM the Aussie was buying $US88.14 cents, 53.49 Pence Sterling, 91.96 Yen and 64.98 Euro cents.
Figures
Wall Street was a mixed bag: The Dow Jones Industrial Average lost 44 points to close at 16,414, the S&P 500 added 5 points to close at 1,844 and the NASDAQ lifted by 28 points to close at 4,226.
European markets followed suit: London’s FTSE lost 2 points, Paris added 1 point and Frankfurt lifted 14 points.
The Nikkei average gained 1 per cent, recouping most of its losses suffered over the past three trading days, as investors bought back stocks on hopes that Japanese corporate earnings will be strong. Tokyo’s Nikkei added 154 points, Hong Kong’s Hang Seng jumped by 104 points, and China’s Shanghai Composite lifted by 17 points.
The Australian share market made a comeback after a soft start yesterday, ending 0.7 per cent higher led by gains in the financial sector. The S&P/ASX 200 index advanced 36 points to close at 5,332. On the futures market the SPI is 7 points down.
Economic news
All eyes will be on local economic news today with the Australian Bureau of Statistics set to release inflation figures for the December quarter. Economists anticipate the consumer price index to have risen by 0.5 per cent in the three months to December, for an annual rate of 2.5 per cent.
Company news
National Australia Bank Limited
(ASX:NAB) has cut interest rates on personal loans and launched a new offer to attract more credit card customers. The bank cut its variable interest rate on unsecured personal loans by 1.51 percentage points to 11.99 per cent, and launched a zero per cent balance transfer for 15 months. Shares in NAB lifted 1.04 per cent yesterday to $33.99.
Goodman Group
(ASX:GMG) has been approved by Brazilian regulators for a joint purchase of $1.49 billion worth of warehouse and logistics assets being sold by Brazilian real estate developer BR Properties, according to media reports. It comes after the company last year flagged its commitment to the Brazilian portfolio, to be split with WTorre and backed by wholesale funds, reports say. Shares in Goodman Group lifted 2.1 per cent yesterday to close at $4.86.
Ex-dividend Newhaven Hotels Limited
(ASX:NHH) will pay 2 cents per share fully franked.
Commodities
Gold posted its largest decline since the start of the year on speculation the Federal Reserve will reduce its stimulus program again next week. Gold is down $10.10 to $US1,242 an ounce for the February contract on Comex. Silver is down $0.43 to $19.87 for March. Copper is up $0.01 at $3.35 a pound. Oil is up $0.62 at US$94.99 a barrel for February light crude in New York.
