Wall Street rally losing steam: ASX to open lower

Market Reports

by David Chau

The Australian share market is set to open lower this morning, amid a pause in the Wall Street rally.

Yesterday, the Reserve Bank (RBA) decided to maintain the official cash rate at 1.5% for the sixth consecutive month. The RBA expects there is no need to ease monetary policy further as long as the US Fed raises interest rates.

This morning, Wall Street closed lower and will provide a weak lead for the local share market. Weighing on the minds of US investors is the prospect of tighter monetary policy. Currently, the likelihood of the Federal Reserve announcing an interest rate hike next week is around 85%.

Almost every US sector posted losses, but the worst performing stocks were healthcare, as investors digested news of the Republicans' proposed legislation to repeal and replace Obamacare, and US President Donald Trump’s tweet about working on a plan to bring drug prices “way down”.

US economic news

The Commerce Department has released data for January, showing that the US trade deficit widened to US$48.5 billion – its highest level in almost five years, which may point to slower economic growth in the first quarter. The rise in the value of imports was driven by higher oil prices and demand for mobile phones and automobiles.

Markets

Wall Street finished lower this morning: The Dow Jones Industrial Average fell 0.1 per cent to close at 20,925, the S&P 500 was down 0.3 per cent to close at 2,368 and the NASDAQ retreated 0.3 per cent to close at 5,834.

European markets closed mixed: London’s FTSE lost 0.2 per cent, Paris fell 0.4 per cent and Frankfurt was up 0.1 per cent.

Asian markets closed mixed: Tokyo’s Nikkei fell 0.2 per cent, Hong Kong’s Hang Seng added 0.4 per cent, and China’s Shanghai Composite gained 0.3 per cent.

The Australian share market finished higher yesterday: the S&P/ASX 200 index gained 15 points to close at 5,761. On the futures market the SPI is 19 points lower.

Company news

Hunter Hall Global Value (ASX:HHV) has set the date for its showdown with Wilson Asset Management. On 6 April, in Sydney, its shareholders will vote on the composition of its board – with Wilson backing three new independent directors. The current board has urged its shareholders to vote against Wilson’s resolutions. Wilson is the biggest shareholder of Hunter Hall Global Value, with a 12.97% stake, while the second largest shareholder is Washington H. Soul Pattinson, which controls 9.03%. Yesterday, shares in Hunter Hall Global Value closed 0.85% lower at $1.17.

Currencies

The Australian Dollar at 8.30am was buying 75.88 US cents, 62.19 Pence Sterling, 86.49 Yen and 71.82 Euro cents.

Commodities

Gold has slipped by $10.30 to $US1,216 an ounce.
Silver has lost 26 cents to $17.52.
Oil has dropped 9 cents to $US53.11 a barrel.

Ex-Dividends