Outlook: Aus shares set to follow US losses

In a week dominated by discussion of the budget, Australian stocks have made a steady climb with a slight gain at the close of trade yesterday. Meanwhile overnight most major overseas indexes have gone into negative territory and Australian shares look set to follow. 

 

A selloff in small-caps in the US and a poor result from Wal-Mart kept stocks down, while a higher than anticipated Consumer Price Index figure for April points towards growth in the American economy, which is adding to speculation about the prospect of a lift in the US cash rate.

 

Gliobal figures 

Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 167 points to close at 16,447, the S&P 500 lost 18 points to close at 1,871 and the NASDAQ lost 31 points to close at 4,069.

 

European markets closed lower: London’s FTSE lost 38 points, Paris lost 56 points and Frankfurt lost 98 points.

 

Asian markets closed mixed: Tokyo’s Nikkei lost 108 points, Hong Kong’s Hang Seng added 148 points, and China’s Shanghai Composite lost 23 points.

 

The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 14 points up to finish at 5,511. On the futures market the SPI is 29 points down. 

 

Turning to currencies and the Australian Dollar at 7:30AM was buying $US0.9356 cents, 55.74 Pence Sterling, 95.05 Yen and 68.26 Euro cents.

 

Economic news

Due out today from the Australian Bureau of Statistics is lending finance for March.

 

Company news

 

Residential developer Devine Limited (ASX:DVN) will sell the remainder of its Sandstone Lakes project at Ningi, near Bribi Island in Queensland. The reported sale price is $14 million to the developer, QM Properties. The company says the sale will free-up capital to pursue other opportunities. Shares in Devine closed up 2.82 per cent yesterday on the news, to $0.73 

 

Oil Search Limited (ASX:OSH) has completed a share purchase plan raising $184 million on new, fully paid shares. The issue price was $8.20 and the new shares will be allotted on 23 May. Shares in Oil Search closed 0.11 per cent up yesterday on the news to $9.18. 

 

Commodities

Gold is down $12.30 to $US1,294 an ounce for the June contract on Comex.
Silver is down $0.29 to $19.48 for July.
Copper is down $0.01 at $3.14 a pound.
Oil is down $0.87 at US$101.50 a barrel for June light crude in New York.