Outlook: ASX eyes gains on mixed leads

Market Reports

The Australian share market looks to be eyeing gains this morning after US stocks closed mixed in cautious trade. Investors absorbed an unconfirmed report that European leaders and The International Monetary Fund are planning to combine bailout funds, one day after news broke of a debt deal between Germany and France and a ratings warning to EU nations from Standard & Poor’s. Ahead of this week’s EU summit the ratings agency has now threatened to cut the credit rating of the eurozone’s rescue fund.

Economic news

The Reserve Bank of Australia yesterday lowered the official interest rate by 25 basis points to 4.25 per cent. The Bank of Queensland Limited (ASX:BOQ) is the only bank so far to pass the cut on, lowering its standard variable rate home loans by 25 basis points to 7.36 per cent.

Figures

Wall Street closed mixed on Tuesday: The Dow Jones Industrial Average rose 52 points to close at 12,150, the S&P500 added 1 point to close at 1,258 and the Nasdaq lost 6 points to close at 2,650.

European stocks finished mixed: London’s FTSE was up 0.7 points, Paris was down 22 points and Frankfurt was down 77 points.

Asian markets, stocks closed lower: Hong Kong’s Hang Seng was down 237 points, Tokyo Nikkei was down 121 and China’s Shanghai Composite down 7 points.
 
The Australian share market snapped a winning streak yesterday, falling throughout the day to end 1.4 per cent lower: The S&P/ASX 200 Index shed 59 points to close at 4,262. On the futures market the SPI is now 32 points higher.
 
Currencies

The Australian Dollar at 8:40AM was buying $US1.0248 cents, 65.73 Pence Sterling, 79.67 Yen and 76.49 Euro cents.

Economic news

Due out today from the Australian Bureau of Statistics: Gross domestic product data for September quarter. From the Australian Industry Group and Housing Industry Association: The performance of construction index for November.

Company news

Shares in BT Investment Management Limited (ASX:BTT) fell 2.28 per cent yesterday, closing at $1.92. Chairman, Brian Scullin, has cautioned BT Investment Management faces an uncertain outlook because of global market volatility. Speaking at the company’s annual meeting Mr Scullin told investors the fund manager is inextricably linked to the performance of stockmarkets, and senior executives invested in the company are concerned about the share price. BT Investment Management is a wealth manager 60 per cent owned by Westpac Banking Corporation (ASX:WBC). BT Investment Management reported a net profit of almost $17 million in the 2011 financial year.

Shares in David Jones Limited (ASX:DJS) firmed 0.69 per cent on Tuesday, finishing at $2.90. Former DJs chief Mark McInnes has blasted current CEO Paul Zahra for comments that Mr McInnes believe blame him for the department store retailer's current challenges. Mr McInnes defended his management to the Australian Financial Review following an interview with Mr Zahra published in the paper last week. Mr McInnes says his DJs shares have lost a third of their value since Mr Zahra took charge in June last year. David Jones advised last month it expects its profit to drop by 15 to 20 per cent in the first half of fiscal 2012. In fiscal 2011 David Jones posted a net profit of $168 million.

Ex-dividends

One company is going ex-dividend today: Campbell Brothers Limited (ASX:CPB) with a 95 cent 50 per cent franked dividend. Coming up later this week are Metcash and Troy Resources.  

Commodities

The price of gold is down $2.70 to $US1731 an ounce for the February contract on Comex.
Silver is up $0.37 to $32.74 for March.
Copper is down $0.04 at $3.58 a pound.
Oil is up $0.21 at $101.20 a barrel for January light crude in New York.