Outlook: EU doubts set to suppress market

Market Reports

The Australian share market looks to dip lower this morning after global markets fell as doubts increased over Europe’s ability to resolve its debt crisis. Falls on Wall Street widened following disappointing corporate earnings and economic news. And at home all eyes will be on inflation figures from the Australian Bureau of Statistics due out this morning.

US economic news

Consumer confidence has slumped to a two year low. The Conference Board’s household sentiment index dropped to 39.8 in October. Analysts had expected the read to remain unchanged at 46.

The S&P/Case-Shiller index has shown US house prices increased for the fifth consecutive month in August. The gauge of property values across 20 major cities showed prices added 0.2 per cent in August, but are still 3.8 per cent down over the year.

Figures

On Tuesday: The Dow Jones Industrial Average dropped 207 points to 11,707, the S&P500 fell 25 points to close at 1,229 and the Nasdaq retreated 61 points to close at 2,638.

European stocks closed lower: London’s FTSE was down 23 points, Paris was down 46 and Frankfurt was down 9 points.

To Asian markets, stocks finished mixed: Hong Kong’s Hang Seng was up 196 points, Tokyo Nikkei was down 82 and China’s Shanghai Composite was up 39.
 
The Australian share market lost 0.64 per cent on Tuesday: The S&P/ASX 200 Index shed 27 points to close at 4,228. On the futures market the SPI is 37 points lower.
 
Currencies

The Australian Dollar at 8:30AM was buying $US1.0428 cents, 65.19 Pence Sterling, 79.33 Yen and 75 Euro cents.

Economic news

Due out today from the Australian Bureau of Statistics is the Consumer Price Index for the September quarter.

Company news

Shares in Macarthur Coal Limited (ASX:MCC) firmed 0.06 per cent yesterday, closing at $16.21. In a surprise move one of Macarthur’s joint bidders, ArcelorMittal, has announced its abandoning the $4.9 billion takeover, leaving Peabody Energy Corporation as the sole buyer. The steelmaker backed out because it believes the capital it was investing did not reflect the non-controlling, minority business interest it would have in Macarthur. Peabody will now take full control of the bid vehicle, PEAMCoal Pty Ltd, that will continue solely with the takeover. Macarthur Coal is expected to today release its September quarter production report. In the 2011 financial year Macarthur Coal reported a net profit of $241 million.

On Tuesday shares in Argo Investments Limited (ASX:ARG) slipped 0.39 per cent, closing at $5.08, on the same day the Adelaide-based investment firm held its AGM and announced there is a relatively high risk that its earnings expectations will not be achieved this year. Argo has attributed to forecast to higher costs and softer consumer sentiment. Chairman Chris Harris says the company believes share markets around the world will continue to be uncertain and volatile but says Argo has a long term investment philosophy and no debt. In the 2011 financial year Argo Investments increased full year profit by 12 per cent to $172 million.

Ex-dividends

Two companies going ex-dividend today: Joyce Corporation with a $0.02 cent unfranked dividend and Sterihealth with a $0.07 fully franked dividend. Coming up tomorrow: Clover Corporation, FFI Holdings and Freedom Nutritional Products.  

Commodities

Gold is up $48.10 to $US1,700 an ounce for the December contract on Comex.
Silver is up $1.41 cents to $33.05.
Copper is down $0.03 at $3.42 a pound.
Oil is up $1.90 at $93.17 a barrel for November light crude in New York.