The Australian share market is poised for a subdued start to the session after global markets pulled back in the wake of weak economic data from China over the weekend. In the absence of major US economic or earnings reports Wall Street closed in the red but fared better than European or Asian markets.
News that China swung to a trade deficit in February from a surplus the year before hit commodities hard yesterday and put pressure on Australia’s benchmark index. Attention will again remain on the local mining sector following yesterday’s horror falls and after the price of iron ore booked its biggest one-day drop in more than four years.
The Steel Index reports iron ore for immediate delivery to China declined 8.3 per cent yesterday to $US104.70 per tonne, its lowest point since October 2012.
Global markets
Wall Street moved lower on Monday but ended off the session’s lows: The Dow Jones Industrial Average lost 34 points to close at 16,419, the S&P 500 lost 0.87 points to close at 1,877 and the NASDAQ lost 2 points to close at 4,334.
European markets started the week mixed: London's FTSE 100 Index fell 23 points, France's CAC 40 added 4 points and Germany's DAX fell 85 points.
Asian markets dropped following China’s disappointing data and revised Japanese GDP numbers: Japan’s Nikkei dropped 154 points, Hong Kong’s Hang Seng dropped 396 points, and China’s Shanghai Composite dropped 59 points.
Retreating from six-year highs the Australian share market sank almost 1 per cent yesterday: The S&P/ASX 200 Index plunged 50.8 points on Monday to end the session at 5,411.5. On the futures market the SPI is 1 point higher.
Currencies
The Australian dollar at 8:00am was buying $US0.9023, 54.23 Pence Sterling, 93.17 Yen and 65.03 Euro cents.
Economic news due out today
National Australia Bank Limited
(ASX:NAB): Monthly business survey for February
Company news
Fortescue Metals Group Limited’s
(ASX:FMG) founder Andrew Forrest saw about $500 million slashed from the value in his stake yesterday. The iron ore miner’s stock sank along with its peers after the price of the steel making commodity dropped on weak Chinese trade data. Following the stock’s drop after the market closed Resource Development Group Limited
(ASX:RDG) announced Fortescue has appointed it to conduct a wetlands assessment as part of the miner’s Pilbara Iron Ore and Infrastructure Project. Shares in Fortescue Metals Group fell 9.39 per cent on Monday to finish the session at $4.92.
Newcrest Mining Limited
(ASX:NCM) has bought options over two non-core tenements owned by Ram Resources Limited
(ASX:RMR). The tenements are positioned near Newcrest’s Telfer gold-copper mine in the Pilbara region of Western Australia. Newcrest will pay Ram $30,000 annually for both options and meet the minimum spend requirements, giving the company the right to acquire the tenements at any time over the next three years. Shares in Ram Resources jumped more than 11 per cent following yesterday’s announcement, while shares in Newcrest Mining lost 4.08 per cent on Monday to finish the session at $11.51.
Ex-dividends
Commodities
Gold has lifted $3.30 after yesterday’s fall and is buying $US1,341.50 an ounce for the April contract on Comex.
Silver has lost $0.01 to $20.91 for May.
Copper has eased $0.05 to $3.03 a pound.
After two daily gains the price of oil has retreated $1.46 to $US101.12 a barrel for April light crude in New York.
