Following yesterday’s steep sell-off the Australian share market is poised for a positive start ahead of the Reserve Bank of Australia’s last interest rate decision of the year. The SPI is pointing to some recovery despite Wall Street dragging amid China’s soft economic indicators and a slowing of US manufacturing growth.
Across commodity markets the price of iron ore has lifted about $US70 per tonne, iron ore has rebounded from four-year lows and gold is at a one-month high. All eyes will be on Australia’s central bank this afternoon when the RBA is expected to keep the key cash rate on hold at 2.5 per cent for the 16th straight month.
Global markets
Wall Street fell into the new week: The Dow Jones Industrial Average dropped 0.3 per cent to close at 17,777, the S&P 500 dropped 0.7 per cent to close at 2,053 and the Nasdaq dropped 1.3 per cent to close at 4,727.
European markets started the week in the red: London's FTSE 100 declined 1 per cent, France's CAC 40 declined 0.3 per cent and Germany's DAX declined 0.2 per cent.
Asian markets closed mixed on Monday: Japan’s Nikkei rose 0.8 per cent, Hong Kong’s Hang Seng retreated 2.6 per cent, and China’s Shanghai Composite fell 0.1 per cent.
The Australian share market sank into the new week amid a falling oil price and Aussie dollar and data showing slowing growth in China’s factory sector: The S&P/ASX 200 index plunged 105 points to close at 5,208 on Monday. On the futures market the SPI is 15 points higher.
Currencies
The Australian dollar at 8:20am was buying $US0.8494, 54 Pence Sterling, 100.55 Yen and 68.14 Euro cents.
Economic news due out today
Reserve Bank of Australia: December board meeting and interest rate decision
Australian Bureau of Statistics: Building approvals data for October, balance of payments and international investment position for the September quarter and government finance statistics for the September quarter
Dun & Bradstreet: Expectations survey
ANZ Banking Group
(ASX:ANZ)-Roy Morgan: Weekly consumer confidence survey
Company news
Liquefied Natural Gas Limited
(ASX:LNG) was yesterday’s worst performing stock in the worst performing index, with the energy sector sinking more than 6 per cent. After the market closed the company told the ASX its subsidiary Magnolia LNG has agreed to an engineering, procurement and construction contract with SK E&C Group. The proposed contract is for the Magnolia LNG Project and covers the initial 4 million tonne per annum LNG installation and all approvals for the full 8 million tonne per annum project. Execution of the contract is planned for later this month subject to board approval. Liquefied Natural Gas sank 22.46 per cent to close at $2.52 on Monday ahead of the announcement.
Wesfarmers Limited
(ASX:WES) has tied up the $180 million purchase of Workwear Group from Pacific Brands Limited
(ASX:PBG). The conglomerate inked a deal to buy the asset in August and only last week scored the green light from Australia’s competition regulator. Workwear Group includes iconic industrial workwear brands such as Hard Yakka and supplies uniforms and imagewear to large corporates. The acquisition will see 1,000 new employees in five countries join Wesfarmers. Shares in Wesfarmers gained 2.42 per cent to close at $42.96 on Monday following the announcement.
Ex-dividends
ALS Limited
(ASX:ALQ) paying an 11 cent dividend, 10 per cent franked
Commodities
Gold has jumped $42.80 to $US1,218 an ounce for the December contract on Comex.
Silver has risen $1.15 to $16.65 for December.
Copper has gained $0.05 to $2.90 a pound.
Oil has added $2.85 to $US69 a barrel for January light crude in New York.
