Outlook: Aus shares set for soft start

Market Reports

The Australian share market is set for a soft start to the trading day, after Wall Street closed relatively flat amid investor caution ahead of the official monthly jobs report. 

US stocks pared early gains following signs of strength in the US jobs market and after the European Central Bank kept its benchmark interest rate on hold at a record-low level.

US economic data
US jobless claims fell last week, indicating there may be a surprise jump in December job numbers when they are released tomorrow morning AEST. Claims fell to 330,000 beating expectations of 335,000.

The Australian dollar climbed slightly higher, however is trading in a tight range ahead of the release of those all-important US employment figures. At 8:20AM the Aussie was buying $US89.03 cents, 54.03 Pence Sterling, 93.3 Yen and 65.46 Euro cents.

Wall Street was relatively flat. The Dow Jones Industrial Average lost 18 points to close at 16,445, the S&P 500 added 1 point to close at 1,838 and the NASDAQ slipped by 9 points to close at 4,156.
European markets fell on comments from ECB President Mario Draghi, who pledged decisive action if inflation slows further. London’s FTSE lost 30 points, Paris dropped 36 points and Frankfurt shed 76 points.
Asian markets were also in the red as investors took risk averse positions ahead of the release of US jobs data. Tokyo’s Nikkei sank 241 points, Hong Kong’s Hang Seng shed 209 points, and China’s Shanghai Composite fell by 17 points.
The Australian share market lifted in late afternoon trade following the release of Chinese inflation data. The S&P/ASX 200 index ended the session 8 points higher at 5,324. On the futures market the SPI is 7 points down. 
Company news
Aluminium giant Alcoa Inc (ASX:AAI) including minority stakeholder Alumina Limited (ASX:AWC) will pay $432 million to settle charges it paid Bahrain officials bribes to secure business, according to US Justice officials. Alcoa unit Alcoa World Alumina was accused of paying millions of dollars as part of an arrangement made at the request of certain members of Bahrain's royal family. Alumina, the Australian mining company that holds a minority stake in Alcoa World Alumina, is paying 15 per cent of the settlement cost. Shares in Alumina lifted 2.75 per cent yesterday to close at $1.14.
Bega Cheese Limited (ASX:BGA) Chairman Barry Irvin says the takeover tussle for Warrnambool Cheese & Butter Factory Co.(ASX:WCB) shows just how much interest there is for well-performing Australian dairy assets. Mr Irvin told media that Bega was not planning to rejoin the takeover fray, and was instead considering what it would do with its existing 18.8 per cent stake. Shares in Bega lifted 2.22 per cent yesterday to close at $4.60.

Gold is up $2.10 to $US1,228 an ounce for the February contract on Comex. Silver is up $0.02 to $19.56 for March. Copper is down $0.04 at $3.29 a pound. Oil is down $0.33 at US$92 a barrel for February light crude in New York.