Outlook: Aus shares set for steep falls

Market Reports

The Australian share market looks set for steep falls today after offshore markets dropped. Fears of a global slowdown drove stocks down amid Spain’s rising borrowing costs, weak manufacturing reports from the eurozone and China and a dismal jobs report from America. This week eyes will be on monetary policy with the Reserve Bank of Australia's (RBA) monthly board meeting and interest rate decision tomorrow, the European Central Bank’s monthly policy meeting on Thursday and an outlook report from the US Federal Reserve.

Economic news

The Labor Department has reported America’s jobs growth slowed for a third straight month and the nation’s jobless rate rose last month. The US economy added just 69,000 jobs in May, falling well short of the 150,000 jobs expected. The US unemployment rate rose to 8.2 per cent in May from 8.1 per cent the month before.

China's official Purchasing Managers Index dropped to 50.4 in May, coming in only slighly above the 50 level that indicates expansion. A survey on Europe's manufacturing sector dropped to a three year low of 45.1 points, the level that signifies contraction.

Figures

Wall Street retreated on Friday: The Dow Jones Industrial Average dropped 275 points to close at 12,117, the S&P500 dropped 32 points to close at 1,278 and the Nasdaq dropped 80 points to close at 2,747.
 
European markets also fell on Friday: London’s FTSE fell 61 points, Paris fell 67 points and Frankfurt fell 214 points.
 
Asian markets closed mixed on Friday: Hong Kong’s Hang Seng lost 71 points, Tokyo’s Nikkei lost 150 and China’s Shanghai Composite added 1 point.
 
The Australian share market managed to close 0.9 per cent higher over last week despite shedding 0.3 per cent on Friday. The S&P/ASX 200 index lost 12 points on Friday but gained 35 points over the week to finish at 4,064. On the futures market the SPI is now 58 points down.

Currencies

The Australian Dollar at 7:20AM was buying 97.02 US cents, 63.17 Pence Sterling, 75.77 Yen and 78.07 Euro cents.

Economic news out today

The Australian Bureau of Statistics: Business indicators for March quarter

TD Securities - Melbourne Institute: Inflation gauge for May

ANZ Banking Group (ASX:ANZ): Job advertisements series for May

Company news

Glencore's $6 billion takeover bid for dual-listed grain handler Viterra (ASX:VTA) has cleared one of the last remaining hurdles and scored court approval. The news came in the same week Viterra’s shareholders overwhelmingly backed the friendly takeover offer from the Swiss commodities giant. Vitrerra says it now expects the transaction to close by the end of next month. Shares in Viterra dipped 0.31 per cent on Friday to finish the week at $15.92.

Gold explorer and producer Norton Gold Fields Limited (ASX:NGF) has come a step closer to being acquired by China's largest gold company. The takeover target’s board unanimously recommended its shareholders accept a friendly $229 million takeover bid from Zijin Mining at the end of last week. Speculation has been circling Norton Gold Fields after Zijin acquired a 17 per cent stake in the company at the end of last year. Shares in Norton Gold Fields jumped 11.9 per cent on Friday to finish the week at $0.235.

Ex-dividends today

Campbell Brothers Limited (ASX:CPB)
Kathmandu Holdings Limited (ASX:KMD)
Technology One Limited (ASX:TNE)

Ex-dividends later this week

Aditya Birla Minerals Limited (ASX:ABY)
CSR Limited (ASX:CSR)
Transmetro Corporation Limited (ASX:TCO)

Commodities

Gold is up $58.50 to $US1,622 an ounce for the August contract on Comex.
Silver is up $0.76 to $28.51 for July.
Copper is down $0.04 at $3.31 a pound.
Oil is down $3.31 at $83.23 a barrel for July light crude in New York.