The Australian share market looks to rise into the new month after Wall Street gained on the back of the US Federal Reserve’s upbeat assessment of the economy. US stocks shrugged off weaker than expected domestic growth data and finished the month of April strongly with the Dow Jones hitting a record high.
Closer to home a number of companies will hold annual general meetings and ANZ Banking Group
(ASX:ANZ) will be in focus when it releases its interim earnings. Economic reports will also roll in with a series of releases due domestically and China’s Purchasing Managers Index due in the afternoon.
US economic news
The US Federal Reserve has moved in line with expectations and trimmed its bond buying program by an extra $US10 billion to $US45 billion per month. The US central bank’s policy statement also signalled interest rates will stay low for some time.
US gross domestic product grew at a slower rate than expected at the beginning of this year. The US Bureau of Economic Analysis reported GDP grew at an annual rate of just 0.1 per cent in the first quarter of this year, weighed down by the impact of winter weather. Analysts had expected a read of about 1.1 per cent.
The US private sector posted the strongest job growth since November. Payroll processor ADP reported the private sector added 220,000 jobs in April.
Global markets
Wall Street gained ground on Wednesday: The Dow Jones Industrial Average gained 45 points to close at 16,581, the S&P 500 gained 6 points to close at 1,884 and the Nasdaq gained 11 points to close at 4,115.
European markets closed mixed on Wednesday: London's FTSE 100 added 10 points, France's CAC 40 lost 10 points and Germany's DAX added 19 points.
Asian markets closed mixed on Wednesday: Japan’s Nikkei added 16 points, Hong Kong’s Hang Seng lost 320 points, and China’s Shanghai Composite added 6 points.
The Australian share market advanced 1.8 per cent over April but ended the month flat yesterday ahead of the US Federal Reserve’s statement on monetary policy: The S&P/ASX 200 Index added 2.5 points on Wednesday to finish at 5,489. On the futures market the SPI is pointing 17 points higher.
Currencies
The Australian dollar at 7:20am was buying $US0.9287, 55.06 Pence Sterling, 94.94 Yen and 66.99 Euro cents.
Economic news due out today
Australian Bureau of Statistics: International trade price indexes for March quarter
Reserve Bank of Australia: Index of commodity prices for April
Australian Industry Group: Performance of manufacturing index for April
RP Data/Rismark: Home prices for April
Company news
Rio Tinto Limited (ASX:RIO, LON:RIO) has launched a lawsuit to receive compensation for losing half of its mining concession in the Simandou region of south-east Guinea in 2008. The global miner is suing Vale SA, Israeli billionaire Beny Steinmetz and his BSG Resources Limited who are alleged to have conspired to steal mining rights by bribing officials. Rio Tinto was granted a mining concession to Simandou in 2006 and describes the region as one of world’s largest untapped iron ore deposits. Shares in Rio Tinto rose 0.65 per cent on Wednesday to close at $61.70.
ANZ Banking Group
(ASX:ANZ) will today kick of the major bank’s reporting season when it releases its first half results and analysts have forecast a bumper result. Expectations are for ANZ’s interim cash profit to hit $3.5 billion and for the bank to declare a dividend of 81 cents per share, rising from $3.2 billion and 73 cents per share. ANZ yesterday announced David Gonski is set succeed John Morschel as the company’s Chairman from today. Shares in ANZ Banking Group dipped 0.38 per cent on Wednesday to close at $34.47.
Ex-dividends
Australian Masters Corporate Bond Fund No 5 Limited
(ASX:AKY) paying a $1.05 fully franked dividend
Aneka Tambang
(ASX:ATM) paying a 38 cent unfranked dividend
Australian Masters Yield Fund No 1 Limited
(ASX:AYD) paying a $1.00 fully franked dividend
Australian Masters Yield Fund No 2 Limited
(ASX:AYH) paying a 90 cent fully franked dividend
Australian Masters Yield Fund No 3 Limited
(ASX:AYJ) paying a $1.24 fully franked dividend
Australian Masters Yield Fund No 4 Limited
(ASX:AYK) paying a 75 cent fully franked dividend
Tel.Pacific Limited
(ASX:TPC) paying a 3 cent fully franked dividend
Commodities
Gold has lost $0.40 to $US1,295.90 an ounce for the June contract on Comex.
Silver has eased $0.37 to $19.12.
Copper has eased $0.05 to $3.03 a pound.
Oil has fallen $1.54 to $US99.74 a barrel for June light crude in New York.
