Sydney, Dec 2, 2008 (ABN Newswire) - US stocks slumped sharply overnight, wiping out more than half of last week's rally, on growing concern the global economic slump is deepening and consumers' access to credit is shrinking. The S&P 500 sank 8.9% while the Dow Jones Industrial Average plunged 7.7%.
Yesterday, the S&P/ASX-200 share index fell about 1.6%, or 61.3 points, to 3681.2, while the broader All Ordinaries lost 53.7 points, or 1.5%, at 3619. Some US economic research institutions admitted the recession actually started last December, and now the questions are how bad and how long it will be.
In recent trading on the Sydney Futures Exchange, the December Share Price Index futures contract was down 110 points, or about 3%, at 3,571.
The Australian dollar opened weaker as the worst US manufacturing activity report in 26 years added to evidence the US was already in recession. At 0700 AEDT, the Australian dollar was trading at $US0.6453/57, down marginally from Monday's close of $US0.6465/70.
Oil prices tumbled below $US50 a barrel overnight as manufacturing activity in the US hit a 26-year low, a showing that was much worse than expected. Light, sweet crude for January delivery fell 8.4%, or $US4.58 to $US49.85 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
The Reserve Bank board is expected to cut interest rates by 1 percentage point on today's board meeting and to follow up with a series of aggressive cuts. The extraordinary series of cuts now forecast would take the Reserve Bank cash rate from 5.25 per cent to 2.5 per cent within six months.
The Reserve Bank of Australia's index of commodity prices in special drawing rights (SDR) terms fell 2.7 per cent in November, preliminary estimates from the central bank show. This follows an downwardly revised rise of 4.6 per cent in October.
The TD Securities-Melbourne Institute yesterday released inflation gauge, which fell 0.6 per cent in November, after a 0.2 per cent fall in October. The November fall was the sharpest monthly decline since the survey begain in August 2002.
Manufacturing activity fell for the sixth consecutive month to a record low in November as the worsening outlook eroded business and consumer confidence, according to figures released by the Australian Industry Group.
Also today, the Australian Bureau of Statistics releases retail trade data for October and the balance of payments and international investment data for the September quarter. The Housing Industry Association is due to release its state and national outlook for the September quarter.
M&A News
Tollroad investor Macquarie Infrastructure Group(ASX:MIG) may sell half its 50 per cent stake in Sydney's Westlink M7 to Transurban Group(ASX:TCL), the tollroad's other owner. MIG said it had agreed to sell its half-stake in the 40km orbital road in Sydney's west for A$805 million.
Independent News & Media(ISE:IPD) has denied suggestions that it is struggling to find buyers for its 39.1 per cent stake in Trans-Tasman media company APN News & Media(ASX:APN).
Important Corporate News
OZ Minerals(ASX:OZL) has won an extension on a debt refinancing deadline to December 29, a month shorter than the extension to January 31 it was seeking.
Futuris Corporation(ASX:FCL) forecasts a further earnings downgrade and a small profit loss this financial year. Futuris will make a headline loss of A$9 million in 2008-09, with underlying profit after tax lowered to A$60 million compared with the previously announced A$85-$90 million.
Leighton Holdings'(ASX:LEI) project to build a 2.9 billion dirham (A$1.2 billion) Trump Tower in Dubai has been suspended for an indefinite period. Leighton says the suspension of the project will not have a material financial effect on its 45 per cent held Al Habtoor Leighton Group.
Grocery and liquor merchant Metcash Ltd(ASX:MTS) has posted a 7.2 per cent fall in interim net profit after recording a one-off interest hedging termination cost. Metcash's board also reconfirmed its guidance for fiscal 2009, last updated on November 12, that earnings per share (eps) will be in the range of 28.3 to 29.3 cents before non-recurring items.
1. Related Stocks - Mid Market (AEST 1230)
Yesterday, the S&P/ASX-200 share index fell about 1.6%, or 61.3 points, to 3681.2, while the broader All Ordinaries lost 53.7 points, or 1.5%, at 3619. Some US economic research institutions admitted the recession actually started last December, and now the questions are how bad and how long it will be.
In recent trading on the Sydney Futures Exchange, the December Share Price Index futures contract was down 110 points, or about 3%, at 3,571.
The Australian dollar opened weaker as the worst US manufacturing activity report in 26 years added to evidence the US was already in recession. At 0700 AEDT, the Australian dollar was trading at $US0.6453/57, down marginally from Monday's close of $US0.6465/70.
Oil prices tumbled below $US50 a barrel overnight as manufacturing activity in the US hit a 26-year low, a showing that was much worse than expected. Light, sweet crude for January delivery fell 8.4%, or $US4.58 to $US49.85 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
The Reserve Bank board is expected to cut interest rates by 1 percentage point on today's board meeting and to follow up with a series of aggressive cuts. The extraordinary series of cuts now forecast would take the Reserve Bank cash rate from 5.25 per cent to 2.5 per cent within six months.
The Reserve Bank of Australia's index of commodity prices in special drawing rights (SDR) terms fell 2.7 per cent in November, preliminary estimates from the central bank show. This follows an downwardly revised rise of 4.6 per cent in October.
The TD Securities-Melbourne Institute yesterday released inflation gauge, which fell 0.6 per cent in November, after a 0.2 per cent fall in October. The November fall was the sharpest monthly decline since the survey begain in August 2002.
Manufacturing activity fell for the sixth consecutive month to a record low in November as the worsening outlook eroded business and consumer confidence, according to figures released by the Australian Industry Group.
Also today, the Australian Bureau of Statistics releases retail trade data for October and the balance of payments and international investment data for the September quarter. The Housing Industry Association is due to release its state and national outlook for the September quarter.
M&A News
Tollroad investor Macquarie Infrastructure Group(ASX:MIG) may sell half its 50 per cent stake in Sydney's Westlink M7 to Transurban Group(ASX:TCL), the tollroad's other owner. MIG said it had agreed to sell its half-stake in the 40km orbital road in Sydney's west for A$805 million.
Independent News & Media(ISE:IPD) has denied suggestions that it is struggling to find buyers for its 39.1 per cent stake in Trans-Tasman media company APN News & Media(ASX:APN).
Important Corporate News
OZ Minerals(ASX:OZL) has won an extension on a debt refinancing deadline to December 29, a month shorter than the extension to January 31 it was seeking.
Futuris Corporation(ASX:FCL) forecasts a further earnings downgrade and a small profit loss this financial year. Futuris will make a headline loss of A$9 million in 2008-09, with underlying profit after tax lowered to A$60 million compared with the previously announced A$85-$90 million.
Leighton Holdings'(ASX:LEI) project to build a 2.9 billion dirham (A$1.2 billion) Trump Tower in Dubai has been suspended for an indefinite period. Leighton says the suspension of the project will not have a material financial effect on its 45 per cent held Al Habtoor Leighton Group.
Grocery and liquor merchant Metcash Ltd(ASX:MTS) has posted a 7.2 per cent fall in interim net profit after recording a one-off interest hedging termination cost. Metcash's board also reconfirmed its guidance for fiscal 2009, last updated on November 12, that earnings per share (eps) will be in the range of 28.3 to 29.3 cents before non-recurring items.
1. Related Stocks - Mid Market (AEST 1230)
------------------------------------------------- Code % Change Volume Turnover Low High ------------------------------------------------- ASX:TCL -4 1,971,549 $8,967,418 445 467 ASX:LEI -6.03 309,112 $6,612,421 2090 2200 ASX:MTS +.25 1,432,671 $5,711,603 390 406 ASX:MIG -1.69 2,402,040 $4,209,838 171 179 ASX:OZL -5.45 57,895 $157,727 ASX:FCL -3.18 503,861 $387,182 75.5 78 ASX:APN +1.58 38,973 $98,753 247 2592. Top 10 ASX on Turnover - Mid Market (AEST 1230)
------------------------------------------------- Code % Change Volume Turnover Low High ------------------------------------------------- ASX:BHP -6.25 9,585,348 $269,109,448 2744 2815 ASX:RIO -6.15 2,550,994 $110,482,450 3950 4040 ASX:WBC -2.18 5,192,509 $85,072,838 1614 1658 ASX:TLS +1.72 17,338,252 $71,227,542 404 416 ASX:NAB -1.69 2,601,846 $49,239,884 1865 1910 ASX:ANZ -1.66 3,222,284 $45,192,974 1376 1415 ASX:WOW -1.75 1,459,384 $39,228,350 2637 2699 ASX:CBA -2.96 1,163,105 $38,039,901 3161 3231 ASX:FMG +10.8 13,832,686 $32,984,314 214 280 ASX:QBE +.16 1,277,382 $29,977,824 2300 2410
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