Thursday outlook: Aus shares to stabilise on open

Market Reports

by David Chau

Australian shares are set to open steady, or slightly higher, this morning.

Yesterday, the Australian stock market experienced a huge sell-off, shedding $26 billion in value, in its worst day of the year so far. The local market followed the extremely weak lead of US equities, which had its biggest plunge since Donald Trump was elected US President in November 2016.

However, the US equity market stabilised this morning, as investors await the outcome of tomorrow’s vote in Congress on the fate of the Affordable Health Care Act, or Obamacare.

Oil prices continued to fall overnight after the Energy Information Administration said US inventories rose by 5 million barrels last week – which was much higher than expected.

Over in Europe, share markets fell as investors begin to feel less optimistic about the traction of US President Trump’s pro-growth agenda. Overnight in London, a terrorist attack at Westminster Bridge and the UK Houses of Parliament left four people dead and 20 injured, but its impact on the market was seen as limited.

Closer to home, the Reserve Bank of New Zealand announced this morning that it kept interest rates at the record low 1.75%.

Markets

Wall Street finished mixed this morning: The Dow Jones Industrial Average was flat at 20,661 points. The S&P 500 gained 0.2% to 2,348 and the NASDAQ added 0.5% to 5,822.

European markets closed lower overnight: London’s FTSE dropped 0.7 per cent, Paris fell 0.2 per cent, and Frankfurt was down 0.5%.

Asian markets closed lower as well: the Nikkei plummeted by 2.1 per cent due to a stronger Yen, the Hang Seng plunged 1.1 per cent, while the Shanghai Composite was down 0.5 per cent.

The Australian share market finished lower yesterday. The S&P/ASX 200 Index lost 90 points to fall below the 5,700 points mark, before closing at 5,685 points. This morning, on the futures market the SPI is up 19 points.

Company news

Carnegie Clean Energy Ltd (ASX:CCE) plans to raise $6 million through a share purchase plan. The company announced its capital raising plans yesterday, and the money will be used to fund its share of the 10MW Northam Solar Project in Western Australia. Carnegie’s joint venture partner in this project is Lendlease – and construction is expected to commence in mid-2017. Yesterday, Carnegie shares closed 10.13% lower at 7 cents.

Ex-dividends




Currencies

The Australian Dollar at 7:30AM was buying $US76.79 cents, 61.54 Pence Sterling, 85.35 Yen and 71.12 Euro cents.

Commodities

Gold has gained $1.40 to $US1,251 an ounce.
Silver is down $0.04 to $17.54 an ounce.
Oil is down $0.09 to $US48.15 a barrel.