The Australian share market is eyeing a steady start to the week following mixed leads and ahead of the Federal Budget release tomorrow. While European markets dipped at the end of last week Wall Street gained and the Dow Jones Industrial Average hit a record closing high. On the local bourse the Abbott Government’s first budget will steal the spotlight this week amid expectations the hard and tough measures could sting consumer and corporate confidence.
Global markets
Wall Street mainly slipped over last week but closed higher on Friday: The Dow Jones Industrial Average added 32 points to close at 16,583, the S&P 500 added 3 points to close at 1,878 and the Nasdaq added 20 points to close at 4,072.
European markets widened the weekly loss of Friday: London's FTSE 100 lost 25 points, France's CAC 40 lost 30 points and Germany's DAX lost 26 points.
Asian markets largely trimmed the weekly loss on Friday: Japan’s Nikkei added 36 points, Hong Kong’s Hang Seng added 26 points, and China’s Shanghai Composite lost 4 points.
Australian investors traded cautiously last week ahead of the Federal Budget release tomorrow: The S&P/ASX 200 index lost 16 points on Friday, chipping into the weekly gain of 2.7 points to finish at 5,461. On the futures market the SPI is currently steady.
Currencies
The Australian dollar has remained steady from Friday’s close and at 7:20am was buying $US0.936, 55.56 Pence Sterling, 95.33 Yen and 68.05 Euro cents.
Economic news due out today
National Australia Bank Limited
(ASX:NAB): Business Survey, including a read on business confidence and conditions.
Company news
National Australia Bank Limited
(ASX:NAB) has sought to distance itself from an employee charged on Friday with insider trading. 26-year old NAB employee Lukas Kamay allegedly placed trades on the Australian dollar based on confidential Australian Bureau of Statistics (ABS) statistics obtained from his 24-year old friend and employee at the ABS, Christopher Hill. While the bank says the charges do not relate to Mr Kamay’s work at NAB he was fired from his current role on Friday as a result of the investigation. NAB says none of its money or customer money is involved nor any other NAB employee. Shares in National Australia Bank rose 0.7 per cent on Friday to end the week at $34.38.
Citi has upgraded its recommendation for Australia’s largest pure play iron ore miner Fortescue Metals Group Limited
(ASX:FMG) to buy from neutral. The recommendation comes as the price of the steel making commodity slumps to almost an 18-month low of about $US102 per tonne. The investment bank believes Fortescue could benefit from further cost and debt cutting and has put a $5.50 price target on the company. Shares in Fortescue Metals Group are down more than 15 per cent this year and fell 0.21 per cent on Friday to end the week at $4.81.
Commodities
After falling more than $50 over last week the price of gold is trading $0.10 lower at $US1,287.60 an ounce for the June contract on Comex.
Silver is $0.02 lower at $19.12 for May.
Copper is trading $0.02 higher at $3.08 a pound.
Oil has lost $0.27 to $US99.99 a barrel for June light crude in New York.
