Tax reform delays stalls markets: 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.

After a rallying week on Wall Street, the Dow dropped 100 points by close, briefly falling more than 250 points during the day. This comes after concerns that the tax reform could be delayed until 2019. The S&P 500 also pulled back, with industrials leading the decline. The Nasdaq also fell, even though the Tech sector has been on a a performing streak. The greenback declined to a six-day low after the tax cut plan emerged.

On the commodities front, safe haven gold is tracking higher and oil is also up, whereas iron ore has dropped 1.8 per cent.

Local economic news

The Reserve Bank’s statement on monetary policy will come out today. The RBA announced earlier this week the cash rate will remain unchanged at 1.5 per cent, which was widely expected. Policymakers said the Australian economy is expected to advance at an annual rate of around 3 per cent over the coming years supported by outlook of non-mining investment. Inflation is expected to pick up gradually as the economy strengthens.


Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 0.4 per cent to close at 23,462, the S&P 500 declined 0.4 per cent to close at 2,585 and the NASDAQ dropped 0.6 per cent to close at 6,750.

European markets closed lower: London’s FTSE dropped 0.6 per cent, Paris lost 1.2 per cent and Frankfurt declined 1.5 per cent.

Asian markets closed mixed: Tokyo’s Nikkei dropped 0.2 per cent, Hong Kong’s Hang Seng gained 0.8 per cent, and China’s Shanghai Composite increased 0.4 per cent.

And back home, the Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 33 points up to finish at 6,049.

On the futures market the SPI is 28 points down.

Company news

New Zealand-based investment company Infratil (ASX:IFT) recorded revenue of $936 million in six months to September which is a 3.7 per cent decline. Capital investment reached $139.5 million over the period, including a renewable wind farm, investment in Wellington Airport, and wind and solar generation through Longroad Energy. Net debt at the end of September was $705.6 million, down from $913.3 million from March. The interim dividend for FY2018 is sitting at 6 cents a share, the seventh year in a row where the company has increased its dividend. Shares in Infratil (ASX:IFT) closed flat at $2.82.


3 companies are going ex-dividend today:

CSR (ASX:CSR) is paying 13.5 cents, 50 per cent franked,
Kathmandu (ASX:AMD) is paying 8.23 cents fully franked, and
Whitehaven Coal (ASX:WHC) is paying 6 cents unfranked.


One Australian Dollar at 8:40AM was buying 76.79 US cents, 58.44 Pence Sterling, 87.09 Yen and 65.99 Euro cents.


Gold has gained $2.40 to $US1,286 an ounce.
Silver has lost $0.14 to $US17.00 an ounce.
Oil has gained $0.25 to $US57.30 a barrel.