ASX to ignore US earnings and upbeat economic data: Aus shares to open lower


The Australian sharemarket is slated to open on a weak note, bucking the bullish trend on Wall Street due to investors’ doubts over the longevity of stateside companies’ guidance-beating earnings.

Upbeat data on revenues by tech giants Facebook, Amazon and Apple bolstered US benchmark indices, elevating the S&P500 to an intraday high. US economic data was the cherry on the cake, indicating a 6.4 per cent growth in the March quarter and fall in unemployment by 13,000 last week.

European markets closed marginally lower, as inflation fears offset gains driven by US Federal Reserve’s continuation of its easy monetary stance. Germany reported consumer price inflation of 2.1 per cent, exceeding expectations by over 0.1 per cent.

Optimistic sentiment painted most markets across Asia green, as companies fed off encouraging news about unchanged interest rates in the US.

Economic News

Australian Bureau of Statistics is set to release the Business Conditions & Sentiments report.

To the figures from around the globe: Wall Street closed higher yesterday: The Dow Jones Industrial Average added 0.7 per cent to 34,060, the S&P 500 gained 0.7 per cent to 4,211 and the NASDAQ closed 0.2 per cent higher at 14,083.

European markets closed lower, London’s FTSE fell 0.03 per cent, Paris lost 0.1 per cent and Frankfurt closed 0.9 per cent lower.

Asian markets closed higher, Tokyo’s Nikkei was closed, Hong Kong’s Hang Seng gained 0.8 per cent and China’s Shanghai Composite closed 0.5 per cent higher.

Taking all of this into equation, the SPI futures are pointing to a 0.2 per cent fall.

Yesterday, the Australian share market closed 0.3 per cent higher at 7082.

Company news

Aviation services provider Regional Express Holdings or Rex (ASX:REX) has filed an appeal to competition watchdog the ACCC, alleging that rivals Qantas and Virgin had unfairly coordinated efforts to oust the Mascot-based air travel company from domestic competition.

Rex asserted suspicions that the two companies had deliberately cooperated to both drastically upgrade capacity by 80 per cent a month after Rex’s capacity expansion of 55 per cent, on the back of Rex’s announcement of its Melbourne-Sydney route.

The $159 million airlines owner argued that Australia’s largest and second largest carriers would stand to benefit from Rex’s elimination from the market. The company believes this is bound to happen if the aforementioned competitors are to persist with the current capacity dumping activities.

Shares in Regional Express (ASX:REX) closed 2.1 per cent lower at $1.41 yesterday.
Shares in Qantas (ASX:QAN) closed 0.6 per cent higher at $5 yesterday.

Ex-Div

MCP Income Opportunities Trust (ASX:MOT) is paying 0.9 cents unfranked
MCP Master Income Trust (ASX:MXT) is paying 0.64 cents unfranked
NAOS Ex-50 Opportunities Company (ASX:NAC) is paying 1.4 cents fully franked
NAOS Small Cap Opportunities Company (ASX:NSC) is paying 1.25 cents fully franked
Partners Group Global Income Fund (ASX:PGG) is paying 0.6833 cents unfranked

Turning to currencies

One Australian Dollar at 8:00 AM was buying 77.72 US cents, 55.77 Pence Sterling, 84.65 Yen and 64.12 Euro cents.

To Commodities

Iron Ore has lost 0.5 per cent to US$191.60
Iron Ore futures are pointing to 1.1 per cent fall.

Gold has lost $5.60 to US$1768 an ounce.
Silver has fallen $0.03 to US$26.09 an ounce.
Oil was up $1.15 to US$65.01 a barrel.