Pound’s ‘flash crash’ spooks market: Aus shares set to open flat

Market Reports

by Jessica Ellerm

Following negative leads, the Australian share market looks set to open flat. Wall St pulled back on Friday, with all three of the major indexes posting declines for the week. Slightly softer than expected jobs data drove investor sentiment, however the numbers continue to firm the odds of a Fed rate hike later this year. A sharp drop off in the pound on Friday, dubbed the ‘flash crash’ spooked investors, however the currency rebounded, recovering most of its losses.

US economic news

Jobs data was the main focus on Friday. Nonfarm payrolls for the month of September increased by 156,000, coming in below market expectations. Unemployment was up point 1 of a percent to 5 percent in September, however the labour force participation rate did increase over the month, reaching 62.90 percent.

Markets

Wall Street closed lower on Friday: The Dow Jones Industrial Average lost 0.2 per cent to close at 18,240, the S&P 500 dropped 0.3 per cent to close at 2,154 and the NASDAQ fell 0.3 per cent to close at 5,292

European markets closed mixed: London’s FTSE rose 0.6 per cent, Paris lost 0.7 per cent and Frankfurt dropped 0.7 per cent.

Asian markets closed lower: Tokyo’s Nikkei fell 0.2 per cent, Hong Kong’s Hang Seng dropped 0.4 per cent, and China’s Shanghai Composite was closed

The Australian share market closed lower on Friday: The S&P/ASX 200 Index closed 16 points down to finish at 5,467. The market was up 32 points on the week. On the futures market the SPI is 8 points up.

Turning to currencies and the Australian Dollar at 7:20AM was buying $US76.06 cents, 61.41 Pence Sterling, 78.48 Yen and 68.08 Euro cents.

Company news

Bendigo and Adelaide Bank Limited (ASX:BEN) has announced it has purchased approximately $1.35 billion of standard residential home loans from Keystart Housing Scheme Trust. In addition, the bank has also announced it will seek to raise extra capital via a non-underwritten share purchase plan. Eligible shareholders will have the opportunity to apply for up to $7500 shares at a 2.5% discount to the volume weighted average price for the 5 days leading up to the 21 October. Shares in Bendigo and Adelaide Bank Limited closed 1.43 per cent lower on Friday at $11.01.

Seafarms Group Limited (ASX:SFG) has announced it has released its Environmental Impact Statement for the first stage of its prawn aquaculture project in the Northern Territory. The first phase of the projects consists of just over 1000 hectares of land-based production ponds, expected to ultimately yield up to 14,000 tonnes of prawns each year. The company has indicated traditional owners are still considering the project and an Indigenous Land Use Agreement is also under consideration. Shares in Seafarms Group Limited closed flat on Friday at $0.095.

Ex-dividends

4 companies are going ex-dividend today: Australian Leaders Fund Limited (ASX:ALF) will pay 5 cents fully franked, Beacon Minerals Limited (ASX:BCN) will pay 0.25 cents unfranked, Future Generation Investment Company limited (ASX:FGX) will pay 2 cents fully franked and Reece Limited (ASX:REH) will pay 65 cents fully franked.

Commodities

Gold has risen $5.60 to $US1,259 an ounce for the December contract on Comex. \
Silver has gained $0.23 to $17.57 for December.
Copper has lifted $0.01 to $2.17 a pound for December.
Oil has tumbled $0.89 to $US49.55 a barrel for November light crude in New York.