Outlook: ASX to eye earnings reports

Market Reports

As the reporting season ramps up the Australian share market looks set for a steady start to the day following mixed leads. US stocks ended barely changed despite better than expected retail sales figures. European stocks finished higher despite data confirming the region’s economy shrank in the second quarter.

Full year earnings reports are expected from Commonwealth Bank of Australia (ASX:CBA), first-half results from Westfield Group (ASX:WDC), Westfield Retail Trust (ASX:WRT) and OZ Minerals Limited (ASX:OZL) and global miner Rio Tinto Limited (ASX:RIO) will trade ex-dividend.

European economic news

The European Union’s Eurostat has reported the eurozone’s gross domestic product was down by 0.2 per cent in the second quarter of 2012 compared to the first, and down 0.4 per cent compared to the second quarter 2011.

US economic news

The Census Bureau has shown retail sales in America grew 0.8 per cent in July, coming in well above the 0.2 per cent gain expected.

The Bureau of Labor Statistics reported the producer price index lifted 0.3 per cent in July, coming in higher than expected.

Figures

Wall Street ended mixed on Tuesday: The Dow Jones Industrial Average added 3 points to close at 13,172, the S&P500 lost 0.18 points to close at 1,404 and the Nasdaq lost 6 points to close at 3,017.

European markets finished higher on Tuesday: London’s FTSE added 33 points, Paris added 24 points and Frankfurt added 65 points.

Asian marketsended higher on Tuesday: Hong Kong’s Hang Seng added 210 points, Tokyo’s Nikkei added 45 and China’s Shanghai Composite added 6 points.

The Australian share market closed 0.2 per cent higher on Tuesday: The S&P/ASX 200 Index added 9 points to finish at 4,292. On the futures market the SPI is 2 points higher.

Currencies

The Australian Dollar at 7:15AM was buying $US1.049 cents, 66.94 Pence Sterling, 82.62 Yen and 85.16 Euro cents.

Economic news due out today

The Australian Bureau of Statistics: Labour price index for June quarter 2012

Westpac Banking Corporation (ASX:WBC)-Melbourne Institute: Survey of Consumer Sentiment

Stocks to watch

Gindalbie Metals Limited (ASX:GBG) has dispatched its first train load of iron ore from its Karara Iron Ore Project in Western Australia. The miner says the announcement, made after the market closed yesterday, is a historic milestone and represents the first time the project’s integrated mine and rail logistics chain has been used. Gindalbie’s CEO says the Karara Project is now in the home straight and moving to production of first magnetite concentrate by the end of September 2012. Shares in Gindalbie Metals rose 1.65 per cent before making the announcement, closing Tuesday at $0.433.

Shares in Aquila Resources Limited (ASX:AQA) continued to drop yesterday, falling to the session’s worst performer one day after flagging a review of its spending at its $6 billion West Pilbara Iron Ore Project. The coal miner says in light of the macroeconomic environment it is in talks with its joint venture partner to cut costs until the timeline for approvals is more certain. Aquila also advised it is moved to minimum expenditure at the project while it works on finalising the project’s budget for the year ahead. Shares in Aquila Resources fell to yesterday’s worst performer, shedding 7.85 per cent to end Tuesday at $2.23.

Ex-dividends

Milton Corporation Limited (ASX:MLT): 40 cent fully franked final dividend
Rio Tinto Limited (ASX:RIO): 68.5 cent fully franked interim dividend

Commodities

Gold is down $0.40 to $US1,602 an ounce for the December contract on Comex.
Silver is down $0.008 to $27.76 for September.
Copper is down $0.01 at $3.35 a pound.
Oil is up $0.70 at US$93.43 a barrel for September light crude in New York.