Outlook: ASX eyes gains before RBA call

Market Reports

Following positive offshore leads the Australian share market looks to be eyeing gains ahead of the Reserve Bank of Australia’s monthly decision on interest rates this afternoon. US investors overlooked weak construction spending data and concentrated on an encouraging manufacturing report, ahead of the nation’s key monthly jobs report due at the end of this week.

US economic news

America’s latest manufacturing activity figures have come in slightly better than expected. The Institute of Supply Management's index of national factory activity increased to 53.4 in March from 52.4 the month before. A read above 50 indicates expansion.

America’s construction spending dropped in February. According to the Commerce Department construction spending dropped 1.1 per cent to an annual rate of $US808.86 billion, the largest fall in seven months. 

Figures

Wall Street posted a strong start to the second quarter: The Dow Jones Industrial Average added 52 points to close at 13,264, the S&P500 added 11 points to close at 1,419 and the Nasdaq added 28 points to close at 3,120.

European markets also started the second quarter higher: London’s FTSE added 106 points, Paris added 39 points and Frankfurt added 110 points.

Asian markets began the second quarter mixed: Hong Kong’s Hang Seng lost 33 points, Tokyo’s Nikkei added 26 and China’s Shanghai Composite added 11 points.

The Australian share market pulled back from a strong start yesterday to start the second quarter 0.1 per cent lower: The S&P/ASX 200 Index lost 6 points to finish at 4,329. On the futures market the SPI is 27 points higher.

Currencies

The Australian Dollar at 7:15AM was buying $US1.0421 cents, 65.04 Pence Sterling, 85.56 Yen and 78.24 Euro cents.

Economic news due out today

Reserve Bank of Australia: April interest rate decision

Australian Bureau of Statistics: Retail trade data for February

Dun and Bradstreet: Business expectations survey

Company news

Shares in OneSteel Limited (ASX:OST) started the week 2.02 per cent higher, closing at $1.26. Speculation is circling over OneSteel’s new corporate name set to be announced today. The company has reportedly registered the name ONE and OneEnviro as trademarks with Australia's intellectual property agency. Onesteel first revealed it is considering changing its name in February to reflect changes in its business that now make it a mining, mining consumables and steel business. OneSteel swung from a profit to an interim loss of $70.7 million in the first half of its 2012 financial year.

Shares in BHP Billiton Limited (ASX:BHP) rose 1.47 per cent on Monday, finishing at $35.12. The BHP-Mitsubishi coal mining alliance has reportedly declared a force majeure at its six Queensland mines. According to Fairfax Media the miner has warned it won’t be able to fulfil customer contracts because of the wet weather conditions and industrial action. The report says about 4,000 workers went on strike last week and could remain out, depending on the result of a union meeting this evening. BHP reported a net profit of $9.88 billion in the first half of its 2012 financial year.
 
Ex-dividends today

Austbrokers Holdings Limited (ASX:AUB)
Gowing Bros. Limited (ASX:GOW)
Grange Resources Limited (ASX:GRR)
Matrix Composites & Engineering Limited (ASX:MCE)

Ex-dividends tomorrow

Capitol Health Limited (ASX:CAJ)
CIC Australia Limited (ASX:CNB)
David Jones Limited (ASX:DJS)

Commodities

Gold is up $7.70 to $US1,680 an ounce for the June contract on Comex.
Silver is up $0.614 to $33.10 for May.
Copper is up $0.092 at $3.92 a pound.
Oil is up $2.21 at $105.23 a barrel for May light crude in New York.