Outlook: ASX eyes ECB as Wall St hits records

Market Reports

More records on Wall Street could help to support the Australian share market today but traders look to be in for a soft session ahead of the European Central Bank (ECB) meeting tonight. European markets were mixed overnight ahead of the policy announcement while US stocks rebounded on the back of a surge in US services sector growth. The S&P 500 hit yet another record closing high while the Dow closed just shy of another record closing high following a session of mixed economic news releases.   
 
US economic news 

Earlier in the session the ADP National Employment Report reported about 179,000 private-sector jobs were created in May, less than expected, and April’s job creation was downwardly revised by 5,000. The report came ahead of the keenly anticipated US Government’s monthly jobs report on Friday. 

Later in the session the Institute for Supply Management reported the US services sector index lifted more than expected to 56.3 in May from 55.2 the month before and remaining above 50 which indicates expansion.
 
Global markets
 
Wall Street firmed on Wednesday: The Dow Jones Industrial Average added 15 points to close at 16,738, the S&P 500 added 4 points to close at 1,928 and the Nasdaq added 18 points to close at 4,252.
 
European markets ended mixed on Wednesday: London's FTSE 100 lost 18 points, France's CAC 40 lost 3 points and Germany's DAX added 7 points.
 
Asian markets also closed mixed on Wednesday: Japan’s Nikkei added 34 points, Hong Kong’s Hang Seng lost 139 points, and China’s Shanghai Composite lost 13 points.
 
The Australian share market closed 0.6 per cent down at session lows yesterday after better than expected domestic growth data supported the case for rates to rise from historic lows: The S&P/ASX 200 index fell 35 points on Wednesday to finish at 5,445. On the futures market the SPI is pointing 9 points higher. 
 
Currencies 
 
The Australian dollar has firmed on the back of softer US private jobs growth, and, at 7:20am was buying $US0.9277, 55.45 Pence Sterling, 95.31 Yen and 68.24 Euro cents.
 
Economic news due out today 
 
Australian Bureau of Statistics:International trade in goods and services data for April 
 
Company news
 
Doubts over David Jones Limited (ASX:DJS) takeover have surfaced as the department store retailer's stock continues to decline. DJs shares shot up to about $3.93 after South African retail group Woolworths launched its $2.15 billion takeover in early April. However the company’s stock has been heading lower amid speculation retail magnate Solomon Lew could be in a position to potentially oppose the transaction. Media reports speculate Mr Lew is lifting his stake in the business to influence a shareholder vote on the deal at the end of this month. Shares in David Jones closed 2.79 per cent lower on Wednesday at $3.83. 

BHP Billiton Limited (ASX:BHP) is understood to have cut about 100 staff from the iron ore division of its Perth headquarters. The reported cuts come as the price of the steel making commodity trades at almost two-year lows of $US92 per tonne, having shed about 30 per cent this year. BHP has not formally confirmed the cuts but told the media it is committed to a productivity agenda and focussed on value through growing volumes while reducing costs. Shares in BHP Billiton closed 0.66 per cent lower on Wednesday at $36.16. 
 
Commodities 

Gold has lost $0.20 to $US1,244.30 an ounce for the August contract on Comex. 
Silver has lifted $0.03 to $18.79 for July. 
Copper has eased $0.04 to $3.09 a pound. 
Oil has slipped $0.02 to $US102.64 a barrel for July light crude in New York. 

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