The Australian share market is set to continue its downward spiral today, as US stocks rebounded in late afternoon trade despite a disappointing read on new home sales in America.
US economic news
Sales of new US homes dropped significantly more than expected in December, with some blaming the cold weather. Purchases decreased 7 per cent to a yearly pace of 414,000. However, demand jumped 16.4 percent to 428,000 over the entire year.
Meantime investors also seem to be proceeding with caution ahead of a meeting of the US central bank's Federal Open Market Committee later this week. The Federal Reserve is expected to cut back on its bond-buying program again.
Wall Street clawed its way back in late afternoon trade. At 7.25am Australian Eastern Standard Time the Dow Jones Industrial Average gained 24 points to trade at 15,904, the S&P 500 lost 1 point and was trading at 1,789 and the NASDAQ fell 16 points to trade at 4,112.
European markets were led lower by London's FTSE, due in part to news US telco AT&T has no plans to buy Vodafone Group. London’s FTSE lost 113 points, Paris shed 17 points and Frankfurt dipped by 43 points.
Japan's Nikkei average plummeted to a two-month low as the yen made strong gains and fears mounted about a sell-off in emerging-market assets: Tokyo’s Nikkei tumbled by 386 points, Hong Kong’s Hang Seng plunged by 474 points, and China’s Shanghai Composite fell by 21 points.
The Australian share market dropped on Friday to end lower for the third consecutive week. The S&P/ASX 200 index shed 22 points on Friday, deepening the weekly fall of 65 points to finish at 5,241. On the futures market the SPI is 23 points lower.
The Australian dollar rose above 87 US cents in overnight trade, with currency analysts declaring bargain hunters went on a shopping spree. At 7:25AM the Aussie was buying $US87.54 cents, 52.81 Pence Sterling, 89.89 Yen and 64.04 Euro cents.
The National Australia Bank will release its business confidence survey results for December.
Poseidon Nickel Limited (ASX:POS)
is set to inform investors about progress made on its capital raising today, according to media reports. Andrew Forrest’s nickel miner has reportedly been attempting to raise funds for the development of the Windarra Project in Western Australia. Shares in Poseidon last traded at 10.5 cents.
Echo Entertainment Group Limited (ASX:EGP)
is selling its Jupiters casino in Townsville, to Colonial Leisure Group for $70 million. The casino operator expects to make a pre-tax profit on the deal of about $8 million, after transaction costs. Chief executive John Redmond says the company is committed to investing in the development of Jupiters Gold Coast and Treasury Brisbane. Shares in Echo closed flat on Friday at $2.41.
Gold is down $0.90 to $US1,263 an ounce for the February contract on Comex. Silver is up $0.03 to $19.79 for March. Copper is down $0.01 at $3.26 a pound. Oil is down $1.14 at US$95.50 a barrel for March light crude in New York.