News: Outlook: Aus shares set to slump

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    The Australian sharemarket is set to slump this morning. Morgan Stanley says the US and euro zone are dangerously close to recession, global markets plunging overnight in response. Locally, it’s a crucial day for reporting season with results from QBE Insurance Group Limited (ASX:QBE), Fortescue Metals Group Limited (ASX:FMG) and Santos Limited (ASX:STO) all expected.

    US economic news

    Jobless claims rose by 9,000 to 408,000 last week, the highest in a month.

    The Consumer Price Index (CPI) increased half a percent in July spurred by increases in energy and food prices.

    US manufacturing in the mid-Atlantic states declined in August to an index of negative 30.7 from a positive 3.2 last month.

    And the average rate for a 30-year fixed loan mortgage dropped to 4.15 per cent, the lowest level in more than half a century.


    On Thursday, the Dow Jones Industrial Average was down 420 points to close at 10,991, the S&P500 fell 53 points to close at 1,141 and the NASDAQ lost 131 points to close at 2,380.

    European stocks were lower: London’s FTSE down 239 points, Paris fell 178, and Frankfurt lost 346 points. 

    To Asian markets and stocks were also lower: Hong Kong’s Hang Seng down 273, Tokyo’s Nikkei fell 114 points and China’s Shanghai Composite lost 42.


    The Australian share market closed weaker on Thursday: The S&P/ASX 200 Index finished the day down 53 points at 4,251. On the futures market the SPI is down 103 points.


    The Australian Dollar at 7:40AM was buying $1.0381 US cents, 62.86 Pence Sterling, 79.45 Yen and 72.46 Euro cents.

    Company news

    On Thursday shares in National Australia Bank Limited (ASX:NAB) ended the day down 0.86 per cent at $23.16. NAB chief Cameron Clyne predicts interest rates will stay put for the rest of the year. Mr Clyne says a rate cut could lead people to increase savings rather than spending. The chief executive says Australia is facing the hard yards of microeconomic reform to lift productivity. For the half year to March, NAB posted a profit of $2.4 billion.

    Yesterday shares in BHP Billiton Limited (ASX:BHP) ended the day down 1.81 per cent at $39.10. The mining giant has approved a $415 million investment to expand mining in Colombia. BHP is contributing a third of the cost, with joint venture partners Anglo American and Xstrata paying the rest. The mine’s annual production will increase by 8 million tonnes to 40 million. Construction will begin later this year. BHP Billiton reported a half yearly net profit of $10.5 billion to December 2010.


    There are three companies going ex-dividend today. They are Korvest Limited with a $0.15 fully franked dividend, My Net Fone Limited with a $0.01 unfranked dividend and Tabcorp Holdings Limited with a $0.19 fully franked dividend.


    Gold is up $28.20 to $US1,822 an ounce for the December contract on Comex, silver has risen $0.34 to $40.69 for September and copper is down $0.07 at $3.97 a pound. Oil has fallen $5.20 to $82.38 a barrel for September light crude in New York.

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