Worst day on Wall St in 2 months: Aus shares to open lower

Market Reports

by Kathy Skantzos

Following weak leads from US markets, the Australian share market looks set to open lower this morning.

The Dow plummeted 112 points by close and dropped nearly 200 points at its lowest yesterday, setting a record for the worst day in nearly two months since 5 September 2017. It was pulled down by Boeing which had the largest fall after reporting a loss in revenue in two of its businesses. The US dollar is sitting flat and the Australian dollar fell 1 per cent against the greenback in a 3-and-a-half month low.

On the commodities front, oil has dropped, gold is flat and iron ore has dropped slightly.

US economic news

New orders for US durable goods rose 2.2 per cent month-on-month in September after a 2 per cent increase in August, and well above market expectations of a 1 per cent gain. Orders for transport equipment rose 5.1 per cent and nondefense aircraft and parts went up 31.5 per cent.

Mortgage applications in the US fell 4.6 per cent in the week ending 20 October 2017, the biggest decline in 5 weeks, after rising 3.6 per cent in the previous period. Re-finance applications went down 3 per cent and applications to purchase a home dropped 6.1 per cent.

Local economic news

The quarterly import and export prices will be released today. Import prices unexpectedly dropped 0.1% in the June quarter after the market expected a 1.5 per cent drop. Export prices saw a 5.7 per cent fall in the second quarter, which was less than the 6.3 per cent market expectation.

Figures

Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 0.48 per cent to close at 23,330, the S&P 500 dropped 0.47 per cent to close at 2,557 and the NASDAQ fell 0.52 per cent to close at 6,564.

European markets also closed lower: London’s FTSE dropped 1.05 per cent, Paris lost 0.4 per cent and Frankfurt fell 0.5 per cent.

Asian markets closed mixed: Tokyo’s Nikkei fell 0.45 per cent, Hong Kong’s Hang Seng gained 0.5 per cent, and China’s Shanghai Composite rose 0.3 per cent.

And back home, the Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 8 points up to finish at 5,906.

On the futures market the SPI is 11 points down.

Company news

Centuria Capital Group (ASX:CNI) has announced the successful completion of its retail entitlement offer which was well supported. Raising $24 million at $1.28 per security, the entitlement offer has totalled $60 million with the institutional component. The securities were announced on Wednesday 4 October closing last Friday and will commence trading on Monday 30 October. Shares in Centuria Capital Group (ASX:CNI) last traded 0.1 per cent higher to close at $1.42.

CIMIC Group (ASX:CIM) has received a Standard & Poor’s credit rating of BBB+. The global rating is announced as S&P said CIMIC’s assets are “strong, reflecting its solid market position in Australia’s construction and contract mining sectors.” After CIMIC Group’s majority shareholder, Germany’s HOCHTIEF, announced its intention to make a voluntary public takeover offer to all shareholders of the world’s leader in toll roads, Albertis, S&P stated that if the transaction is successful, the combined entity would be one of the largest groups among the transportation infrastructure sectors.” Shares in CIMIC Group (ASX:CIM) last traded 1.98 per cent higher to $47.42.

Ex-dividends

One company is going ex-dividend today: Turners Automotive (ASX:TRA) is paying 2.32 cents fully franked.

Currencies

One Australian dollar at 7:30AM was buying 76.98 US cents, 58.09 Pence Sterling, 87.59 Yen and 65.23 Euro cents.

Commodities

Gold has gained 20 cents to $US1,279 an ounce.
Silver has lost 1 cent to $US16.95 an ounce.
Oil has lost 25 cents to $US52.22 a barrel.