Outlook: Aus shares set to plummet

Market Reports

The Australian share market is set to plunge at the open, after heavy falls on Wall Street following the Federal Reserve’s announcement this morning that it plans to continue to withdraw its stimulus program.
 
The US Federal Open Market Committee says it will cut its monthly bond purchases by $US10 billion a month, to $US65 billion.
 
It comes after the Fed in December announced plans to begin scaling back the program.

Currencies
 
The Australian dollar dropped after the US Federal Reserve said it would continue to taper. The local currency also lost ground as emerging market currencies fell on news of interest rate hikes in Turkey and South Africa.At 8:25AM the Aussie was buying $US87.38 cents, 52.78 Pence Sterling, 89.33 Yen and 63.97 Euro cents.
 
Figures

Wall Street took a beating on the news from the US Fed: The Dow Jones Industrial Average shed 190 points to close at 15,739, the S&P 500 dropped 18 points to close at 1,774 and the NASDAQ tumbled 47 points to close at 4,051.
 
European markets fell as investors remained cautious ahead of the US Fed decision: London’s FTSE and Paris both shed 28 points and Frankfurt fell 70 points.
 
Asian markets soared. Japan's Nikkei share average jumped 2.7 per cent, its biggest gain in almost five months, after Turkey hiked its interest rates, which stopped selling in emerging stock markets. Tokyo’s Nikkei surged 404 points, Hong Kong’s Hang Seng added 181 points, and China’s Shanghai Composite gained 11 points.
 
The Australian share market climbed to session highs yesterday, led by a 1.6 per cent gain from the resources sector. The S&P/ASX 200 index gained 54 points to finish the session at 5,229. On the futures market the SPI is 62 points down. 
 
Economic news

The Australian Bureau of Statistics will release international trade price indexes for the December quarter.
 
Company news
 
AJ Lucas Group Limited (ASX:AJL) CEO Allan Campbell has resigned from the company, with Chairman Phil Arnall to act in the role until a new CEO is appointed. Mr Campbell said he was leaving AJ Lucas with a strengthened balance sheet, after 19 years of sustained pressure. Shares jumped on the news by 1.28 per cent yesterday to close at $1.18.  
 
Moko Social Media Limited (ASX:MKB) has inked an agreement with high-profile political commentator Jimmy Williams to head-up and co-develop a social network focused on US politics. The app is set to target everyone from grass-root activists to those interested in the political scene. Shares in Moko surged 2.27 per cent yesterday to close at 22.5 cents. 
 
Commodities

Gold is up $11.40 to $US1,262 an ounce for the February contract on Comex. Silver is up $0.05 to $19.55 for March. Copper is down $0.01 at $3.24 a pound. Oil is down $0.05 at US$97.36 a barrel for March light crude in New York.

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