The Australian share market is set for a steady start to the week with New South Wales, Queensland, the ACT and South Australia on public holidays. Wall Street was boosted by a strong jobs report and expansion in service industries reported at the end of last week, lifting the major indexes above 1 per cent on Friday. However, the stronger than expected outlook for the US economy fuels speculation stimulus could be withdraw faster and so may put downwards pressure on markets.
In the week ahead local traders will focus on the Reserve Bank Board’s October meeting and interest rate decision tomorrow and September jobs data due Thursday. Lighter trade is expected today with many breaking for the long weekend but a monthly inflation gauge and job ads figures may influence direction.
US economic news
America’s jobless rate unexpectedly fell to a six-year low last month as employers created more jobs than expected. The Labor Department showed US employers added 248,000 jobs last month, against expectations for a rise of up to 215,000. The US unemployment rate declined from 6.1 per cent to 5.9 per cent, which is a low not seen since mid-2008 and against expectations for a steady read.
Global markets
Wall Street was supported by a better than expected jobs report on Friday: The Dow Jones Industrial Average gained 1.2 per cent to close at 17,010, the S&P 500 gained 1.1 per cent to close at 1,968 and the Nasdaq gained 1 per cent to close at 4,476.
European markets also finished stronger on Friday: London's FTSE 100 climbed 1.3 per cent and France's CAC 40 jumped 0.9 per cent while Germany's DAX was closed for a public holiday.
Asian markets finished higher on Friday: Japan’s Nikkei firmed 0.3 per cent and Hong Kong’s Hang Seng rose 0.6 per cent while China’s Shanghai Composite remained closed for a public holiday.
The Australian share market snapped five weeks of losses on Friday: The S&P/ASX 200 Index gained 21 points on Friday to post a weekly gain of 4.8 points and finish at 5,318. On the futures market the SPI is 3 points higher.
Currencies
The Australian dollar at 7:30am was buying $0.8682, 54.42 Pence Sterling, 95.26 Yen and 69.41 Euro cents.
Economic news due out today
TD Securities and the Melbourne Institute: Inflation gauge for September
ANZ Banking Group
(ASX:ANZ): Job advertisements data for September
Company news
BC Iron Limited
(ASX:BCI) has declared its takeover offer for Iron Ore Holdings Limited
(ASX:IOH) unconditional. The suitor says it had secured 83 per cent of its target last Thursday evening and the offer is now scheduled to close next Tuesday evening. BCI Iron is offering Iron Ore Holdings shareholders 0.44 new BC shares and $0.10 in cash for every Iron Ore Holdings share held. Both companies have urged shareholders who have not accepted the offer to do so without delay. Shares in BC Iron dropped 2.22 per cent on Friday to end the week at $1.54 prior to the announcement.
Cedar Woods Properties Limited
(ASX:CWP) has scored final environmental approval for the Mangles Bay Marina-Based Tourism Precinct at Rockingham, Western Australia. The property developer says the environmental approval, along with the 14 stringent conditions set by the Federal Department of the Environment, represents a landmark step for the proposal and concludes the environmental assessment process. Cedar Woods Properties now plans to progress to the planning phase, including a plan to deliver social, community and economic objectives. Shares in Cedar Woods Properties eased 0.85 per cent on Friday to end the week at $7.04 prior to the announcement.
Commodities
America’s stronger than expected jobs report has pushed the price of gold under $US1,200. The precious metal has fallen $US22.20 to $US1,192.90 an ounce for the December contract on Comex.
Silver has dropped $0.22 to $16.83 for December.
Copper has is steady at $2.99 a pound.
Oil has eased $1.27 to $US89.74 a barrel for November light crude in New York.
