After recovering from most of the week’s steep losses the Australian share market looks poised for a steady start to the day. US investors were encouraged by the latest economic data but Europe’s economic woes continued to drag on sentiment and cap market gains. At home eye will be on Australia’s first quarter growth figures due this morning.
US economic news
The Institute for Supply Management's services index grew at a faster rate than expected last month, gaining to 53.7 per cent in May from 53.5 per cent the month before.
Wall Street closed higher on Tuesday: The Dow Jones Industrial Average added 26 points to close at 12,128, the S&P500 added 7 points to close at 1,286 and the Nasdaq added 18 points to close at 2,778.
European markets finished mixed on Tuesday: London last closed at 5,260, yesterday Paris added 32 and Frankfurt eased 9 points.
Asian markets closed higher yesterday: Hong Kong’s Hang Seng added 73 points, Tokyo’s Nikkei gained 86 and China’s Shanghai Composite added 3 points.
The Australian share market bounced back from a six month low on Tuesday, recovering 1.5 per cent after the Reserve Bank of Australia (RBA) cut rates by 25 basis points to 3.5 per cent. The S&P/ASX 200 index gained 59 on Tuesday and to close at 4,044. On the futures market the SPI is now 7 points higher.
The Australian Dollar at 7:15AM was buying 97.44 US cents, 63.39 Pence Sterling, 76.75 Yen and 78.26 Euro cents.
Economic news out today
Australian Bureau of Statistics: National accounts including gross domestic product figures for the March quarter 2012
Shares in Coca-Cola Amatil Limited (ASX:CCL) rose as the company detailed its ambitions to return to the domestic brewing industry by 2014. In a presentation to investors the soft drink maker revealed it will adopt a six-step program to take on Australia’s top beer brewers. Coca-Cola Amatil exited Australia’s brewing industry when it sold its brewing joint venture to SABMiller when acquiring Foster’s Group last year. Shares in Coca-Cola Amatil rose 1.09 per cent yesterday, closing at $12.94
Shares in QR National (ASX:QRN) gained as the company outlined restructuring plans which include an expected 500 job cuts in an effort to slice its business costs. The rail freight operator says it has started talks with its employees and unions about its voluntary redundancy scheme. Managing Director Lance Hockridge told the Australian Securities Exchange that QR National continues to deal with a range of legacy issues after more than 145 years in government ownership and its cost base is too high when compared to competitors and rail industry peers. Shares in QR National gained 4.83 per cent yesterday, closing at $3.47.
CSR Limited (ASX:CSR)
Transmetro Corporation Limited (ASX:TCO)
Gold is up $3.00 to $US1,617 an ounce for the August contract on Comex.
Silver is up $0.40 to $28.41 for July.
Copper is down $0.02 at $3.29 a pound.
Oil is up $0.31 at $84.29 a barrel for July light crude in New York.