Outlook: Aus shares may be in for flat start

Market Reports

The Australian share market may be in for a flat or slightly higher start this morning following a lacklustre finish on Wall St overnight.

US stocks closed little changed on Tuesday as investors welcomed some modestly better economic news but remained cautious after the release of the US Federal Reserve’s minutes from its August 10 meeting.

According to CNN Money the minutes caused concern that the Fed may not take the measures needed to support the economy’s recovery unless conditions worsen significantly.

In economic news out of the US: The Conference Board's index of consumer confidence rose to a read of 53.5 in August. Economists expected a read of 50.

The Chicago PMI, a regional reading on manufacturing activity, dropped to a read of 56.7 in August, down from 62.3 in July. Economists expected a read of 57.

And the S&P/Case-Shiller Home Price Index reported that home prices rose 4.4% in the second quarter, compared to a 2.8% drop in the first quarter.

On Tuesday, the Dow Jones Industrial Average closed 5 points higher at 10,015. The S&P 500 Index is flat at 1,049 and the NASDAQ is down 6 at 2,114.

European stocks were higher; London’s FTSE climbed 24, Paris up 4 and Frankfurt gaining 13.

Asian markets were lower: Hong Kong’s Hang Seng down 201 points on Tuesday, Tokyo’s Nikkei fell 325 points and China’s Shanghai Composite dropped 14 points.

The Australian share market finished lower on Tuesday. The S&P/ASX 200 Index closed 49 points weaker to 4,404 and on the futures market the SPI200 is up 41 points. Turning to currencies and the Aussie Dollar at 7:50AM was buying 89.1 US cents, 58.04 Pence Sterling, 75 Yen and 70.23 Euro cents.

In local economic news: Out today is ABS national accounts data (GDP quarterly growth), RBA index of commodity prices for August and the Australian Industry Group/Pricewaterhouse performance of manufacturing index also for August.

In business news: Shares in global miner BHP Billiton Ltd (ASX:BHP) fell 2.16% to $37.05 yesterday. The miner has come under fire from takeover target, Canada’s Potash Corp, who claim BHP has been harassing its fertiliser customers. According to a report in The Age, Potash says BHP has been calling its customers to sow seeds of doubt and confusion about the fertiliser’s future by bringing into question its ability to do business in the nutrient spectrum.The paper says Potash has called the miner’s actions inappropriate and highly unethical. BHP launched a US$40 billion hostile takeover bid for the company last month. BHP earned $7.24 billion in the year to June 30, 2009.

Shares in Western Plains Resources Ltd (ASX:WPG) closed steady at $0.68 on Tuesday. The iron ore company says it expects to finalise debt financing for its Peculiar Knob project in South Australia this month. The company, who will now be known as WPG Resources after shareholders approved the name change yesterday, says it is in advanced talks with a number of the world’s bluest of blue chip investment banks and non bank financiers who have expressed interest in financing the project. A final investment decision is expected by December this year with exports to begin from Port Pirie in the second half of next year. Western Plains Resources has posted net losses in the last three years.

To ex-dividends: Among those going ex-dividend today is APN News and Media with a 5 cent unfranked dividend, Caltex Australia with a 30 cent fully franked dividend, Oz Minerals with 3 cent unfranked dividend, and Santos with a 22 cent fully franked dividend.

Turning to commodities: The price of gold is up $11.20 to US$1248, silver is up $0.36 at $19.40, copper is down $0.05 at $3.36, and the price of oil is down $2.78 to US$71.92 a barrel for October light crude in New York.