Outlook: ASX set for more horror falls

Market Reports


The Australian share market looks set to continue its horror start to the year after US stocks shed 2 per cent ahead of the long weekend with markets there closed Monday for Martin Luther King Day. 
 
Wall Street fell as much as 3.5 per cent in early trade following further plunges in the oil price and a sell-off in Chinese stocks. 
 
Disappointing economic news also added to investor concerns with the data showing that the US economy has slowed in the fourth quarter.
 
Economic news

The Producer Price Index slipped 0.2 per cent after a promising 0.3 per cent rise in November. In the 12 months to the end of December the PPI was down 1 per cent. US business inventories for November fell by 0.2%. Meanwhile Industrial output was 0.4 per cent weaker in December. November figures were also revised downward from a 0.6 per cent drop to a 0.9 drop. The numbers have been declining for three consecutive months now adding to fourth quarter woes.

Markets

Wall Street closed sharply down ahead of the weekend: The Dow Jones Industrial Average lost 2.4 per cent to close at 15,988, the S&P 500 lost 2.2 per cent to close at 1,880 and the NASDAQ lost 2.7 per cent to close at 4,488.
 
European markets closed lower: London’s FTSE slipped 1.9 per cent, Paris lost 2.4 per cent and Frankfurt retreated 2.5 per cent.
 
Asian markets closed also closed down: Tokyo’s Nikkei dipped 0.5 per cent, Hong Kong’s Hang Seng was 1.5 per cent down, and China’s Shanghai Composite shed 3.6 per cent.
 
The Australian share market closed lower on Friday: The S&P/ASX 200 Index closed 17 points down to finish at 4,893 to be 98 points down on the week. On the futures market the SPI is pointing 87 points lower. 
 
Currencies

The Australian Dollar at 7:30AM was buying 68.37 US cents, 47.96 Pence Sterling, 79.86 Yen and 62.53 Euro cents.
 
Economic news

Due out today from the Australian Bureau of Statistics are new motor vehicle sales for December. The TD- Melbourne Institute inflation gauge for December is also due. 
 
Company news
 
Regional Express Holdings Limited (ASX:REX) says it has taken advantage of the recent weakness in the oil price to hedge its fuel costs during the third quarter of 2017. This should result in savings of around $4.7 million from its costs in the third quarter of 2016. Shares in REX last traded 0.58 per cent down at $0.86.
 
And Austal Limited (ASX:ASB) says they have delivered a Expeditionary Fast Transport 6 to the US Navy on January 14th. Three more vessels as part of a US$1.6 billion ten ship order are still outstanding. Shares in Austal last traded 7.17 per cent down at $1.04. 
 
Ex-dividends

One company is trading ex-dividend today, Tower Limited will pay 6 cents with no franking. 
 
Commodities

Gold has added $17.10 to US$1,091 an ounce for the February contract on Comex. Silver is up 15 cents to $13.90 for March. Copper has shed 3 cents to $1.94 a pound. Oil has slipped $1.72 to US$30.39 a barrel for February light crude in New York.