The Australian share market is poised to drop at open after US and European markets fell on concerns over the health of the global economy. Soft manufacturing figures from the US and China unnerved investors along with ongoing jitters over Russia’s plans for Crimea. The price of gold posted its biggest daily loss of the year and plunged 2 per cent amid the threat of higher US interest rates lessening demand for the safe haven asset.
US economic news
The latest read on factory activity in America has declined. Markit’s flash PMI fell to 55.5 in March from a final February reading of 57.1, but remained above 50 which indicates expansion.
China economic news
A preliminary gauge of nationwide manufacturing activity in China has unexpectedly fallen to an 8-month low, fuelling speculation the nation may need to turn to stimulus to reach its annual economic growth target of 7.5 per cent in 2014. HSBC and Markit reports China’s PMI fell to 48.1 in March, down from expectations of a rebound to 48.7 and down from the final read of 48.5 in February – all under 50 which indicates contraction.
Global markets
Wall Street started the week in the red: The Dow Jones Industrial Average fell 26 points to close at 16,277, the S&P 500 fell 9 points to close at 1,857 and the NASDAQ fell 50 points to close at 4,226.
European markets also ended Monday lower: London's FTSE 100 Index dropped 37 points, France's CAC 40 dropped 59 points and Germany's DAX dropped 154 points.
Asian markets started the week higher: Japan’s Nikkei gained 251 points, Hong Kong’s Hang Seng gained 410 points, and China’s Shanghai Composite gained 19 points.
The Australian share market crawled out of the red yesterday to end higher on the back of speculation China may be considering stimulus: The S&P/ASX 200 Index added 8.8 points on Monday to close at 5,347. On the futures market the SPI is 33 points down.
Currencies
The Australian dollar at 7:20am was buying $US0.9132, 55.37 Pence Sterling, 93.34 Yen and 66 Euro cents.
Company news
Shares in Yancoal Australia Limited
(ASX:YAL) sank after its major shareholder Yanzhou withdrew its privatisation proposal. The coal developer offered no reason why its suitor walked away from the bid to buy the 22 per cent of the company it does not already own. Yanzhou’s bid to take Yancoal private was launched mid last year and comes just one month after Yancoal booked an $832 million full year loss. Shares in Yancoal Australia sank 9.38 per cent on Monday to close at $0.58.
Watpac Limited
(ASX:WTP) has won a $47 million contract to build stage one of a new hospital west of Brisbane. The property development group says the Mater Private Hospital Springfield is located in one of the country’s fastest growing urban areas. Construction is expected to start next month and slated for completion late 2015. Shares in Watpac fell 0.53 per cent on Monday to close at $0.935.
Commodities
Gold has plunged $24.80 to $US1,311.20 an ounce for the April contract on Comex.
Silver has dropped $0.24 to $20.07 for May.
Copper has eased $0.01 to $2.95 a pound.
Oil has added $0.14 to $US99.60 a barrel for May light crude in New York.
Ex-dividends
Aurora Sandringham Dividend Income Trust
(ASX:AOD) Aurora Property Buy-Write Income Trust
(ASX:AUP) Australian Social Infrastructure Fund
(ASX:AZF)
