Outlook: Aus shares set for cautious open

Market Reports

The Australian share market is set for a tepid open, following weak trading sessions on world markets as investors wait for Federal Reserve chairman Ben Bernanke’s testimony at a congressional hearing.

European economic news
 
There was also economic news out of Europe putting a dampener on things. The OECD says unemployment in the eurozone is set to hit a record 12.3 per cent in 2014. It says there’s been a widening disparity between countries, with jobless rates in Germany set to fall under five per cent by end 2014, but they will soar to around 28 per cent in Spain and Greece.
 
Figures

Wall Street lost some of its recent gains on mixed earnings reports: The Dow Jones Industrial Average dipped 32 points to close at 15,452, the S&P 500 shed 6 points to close at 1,676 and the NASDAQ lost 9 points to close at 3,599.
 
European markets followed suit: London’s FTSE dropped 30 points, Paris fell 28 points and Frankfurt lost 34 points.
 
Asian markets bucked the trend: Tokyo’s Nikkei added 93 points, Hong Kong’s Hang Seng gained 9 points, and China’s Shanghai Composite was up by 6 points.
 
The Australian share market finished flat after a lackluster afternoon of trade yesterday, as investors remained cautious over the RBA minutes. The positive Rio Tinto production report kept the market’s head above water as the S&P/ASX 200 index closed 5 points up at 4,986.
 
On the futures market the SPI is 6 points down. 

Currencies
 
The Australian dollar pushed higher after investors saw the RBA minutes as suggesting there was less chance of another rate cut in August. At7:20AM the Aussie was buying $US92.52 cents, 61.07 Pence Sterling, 91.73 Yen and 70.34 Euro cents.
 
Economic news

The Australian Bureau of Statistics will today release its international merchandise imports data for June and the Westpac-Melbourne Institute will put out its Leading Indexes of Economic Activity.
 
Company news

BHP Billiton Limited (ASX:BHP) will release its June quarter production report, Perseus Mining Limited (ASX:PRU) will put out its quarterly report, Gindalbie Metals Limited (ASX:GBG) June quarter report is out and Iluka Resources Limited (ASX:ILU) will release its June quarter production report.
 
Billabong International Limited (ASX:BBG) has been effectively taken over by US private equity firm Altamont Capital Partners, which has bought the retailer’s debt and ousted chief executive Launa Inman. As part of the deal, Altamont will take a stake of up to 40 per cent of the company in exchange for debt refinancing to the tune of $325 million. It’s also been agreed CEO Launa Inman will leave the company and will be replaced by Scott Olivet, the former CEO and Chairman of Oakley. Shares in Billabong dived 1.96 per cent on the news to 25 cents.
 
Envestra Limited (ASX:ENV) managing director Ian Little says APA Group's $2 billion takeover bid for the gas distribution business does not offer good value for shareholders, according to media reports. APA is Envestra's largest shareholder, holding a 33 per cent stake and has now launched an all-share, non-binding merger offer to Envestra's board. Shares in Envestra shot up 6.13 per cent yesterday to close at $1.12.
 
Commodities

Gold is up $6.90 to $US1,290 an ounce for the August contract on Comex. Silver is up $0.10 to $19.94 for September. Copper is up $0.04 at $3.19 a pound. Oil is down $0.32 at US$106 a barrel for August light crude in New York.