Fed’s unchanged interest rates helps boost market: Aus shares to open higher

Market Reports

by Kathy Skantzos

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

After the Federal Reserve kept interest rates unchanged as expected, the S&P 500 and Dow both closed higher, with the Energy sector advancing. The Nasdaq underperformed, with Apple shares falling more than 1.3 per cent.

The US dollar has risen after above-expectation US employment data, with more than 200,000 new jobs added in October and the Federal Reserve highlighted strong US economic growth.

On the commodities front, oil has dropped and gold is up. Iron ore has charged up nearly 2.2 per cent.

US economic news

Private businesses in the US added 235,000 new jobs in October, the highest reading since March, higher than 110,000 in September and beating market expectations by 200,000.

Mortgage applications dropped 2.6 per cent as of last week after a 4.6 per cent drop the previous period. The average fixed 30-year mortgage rate rose to 4.22 per cent, the highest level since mid-July.

Local economic news

International trade figures for September will be released today. The previous month saw exports rising 1 per cent while imports were nearly unchanged.

Building approvals for September will also be out today. The previous month saw an unexpected rise, beating market expectations.

Figures

Wall Street closed mixed yesterday: The Dow Jones Industrial Average gained 0.3 per cent to close at 23,435, the S&P 500 added 0.2 per cent to close at 2,579 and the NASDAQ lost 0.2 per cent to close at 6,717.

European markets closed mixed: London’s FTSE dropped 0.1 per cent, Paris gained 0.2 per cent and Frankfurt is up 1.8 per cent.

Asian markets closed up: Tokyo’s Nikkei added 1.9 per cent, Hong Kong’s Hang Seng gained 1.2 per cent, and China’s Shanghai Composite is up 0.1 per cent.

And back home, the Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 29 points up to finish at 5,938.

On the futures market the SPI is 4 points up.

Company news

Satellite company Sky and Space Global (ASX:SAS) has expanded its partnership with GomSpace by signing an amendment to the procurement contract previously signed in February. The additional order includes further development to increase capabilities of the Sky and Space Global nanosatellites. The total value of the order is in the range of 13 to 15 million euro and the first delivery is expected for 2018. The order is part of the company’s mission to launch 200 nanosatellites into space by 2020 and provide full satellite coverage of the equatorial belt. Shares in Sky and Space Global (ASX:SAS) closed more than 3 per cent higher to $0.17.

Ex-dividends

1 company is going ex-dividend today:

Bank of Queensland (ASX:BOQ) is paying 46 cents fully franked.

Currencies

One Australian Dollar at 7:35AM was buying 76.79 US cents, 57.95 Pence Sterling, 87.59 Yen and 66.08 Euro cents.

Commodities

Gold has gained $6.00 to $US1277 an ounce.
Silver has gained $0.47 to $US17.16 an ounce.
Oil has lost $0.10 to $US54.28 a barrel.