Weaker commodity prices had resource sector lose yesterday, and a falling oil price in electronic trading in New York overnight may continue to have a constraining effect on energy stocks. With physical markets on Wall Street closed for Labor Day, there is otherwise no lead from the US.
At 6.56am on the Sydney Futures Exchange, the September share price index futures contract was down five points at 5135, which is still higher than yesterday's close.
The Australian dollar has opened lower as the reduced threat of Hurricane Gustav to US oil supplies boosted the American currency. The Australian dollar fell below US85 cents for the second time in as many months after oil and base metals prices declined. At 0700 AEST, the Australian dollar was trading at $US0.8501/08, down from yesterday's close of 0.8537/42.
Oil prices have dived to a four-month low, sliding below $US110 in London as a weakening Hurricane Gustav reduced the threat of damage to energy facilities in the Gulf of Mexico, analysts have said. New York's main contract, light sweet crude for delivery in October, slid $US4.07 to $US111.39 after touching as low as $US110.63.
Key Economic Facts and Figures
The economy is not out of the woods despite a widely-anticipated interest rate cut today, Treasurer Wayne Swan says. The Reserve Bank is tipped to cut its official cash rate by at least 0.25 of a percentage point, if not more, in the first downward move since December 2001. Analysts still expect the rate cut to go ahead, but are doubtful about there being a series of cuts continuing into next year.
Company gross operating profits, seasonally adjusted, rose 21.5 per cent for the year to June, the Australian Bureau of Statistics (ABS) said yesterday. It was the biggest percentage rise since December 2001. Australian businesses posted their largest increase in annual profit growth for almost seven years with the mining boom.
Today, the Reserve Bank of Australia holds its monthly board meeting and is scheduled to announce its decision on the benchmark interest rate at 2.30pm. The Australian Bureau of Statistics releases building approvals data for July and the government finance statistics for the June quarter.
Chinalco chairman Xiao Yaqing says it is "possible" that the Chinese aluminium giant will lift its strategic stake in BHP Billiton's (ASX:BHP) A$160 billion takeover target Rio Tinto((ASX:RIO). But Mr Xiao said Chinalco had not yet decided whether it would lift its shareholding in Rio.
Futuris Corp (ASX:FCL) has agreed to sell its 50 percent stake in Perth-based telecommunications provider Amcom(ASX:AMM). The sale comes on the back of the federal government's decision to cancel funding for the joint venture between Futuris and Optus for an OPEL rural and regional broadband network. The Futuris stake in Amcom was reduced to 18.6 percent. The transaction comprises a selldown by Futuris of 170 million shares to institutional investors and a buyback and cancellation by Amcom of the remaining 99.2 million shares beneficially held by Futuris for an average price of 18 cents each.
Child care operator ABC Learning Centres Ltd. (ASX:ABS) Tuesday said it had completed the sale of its U.K. vouchers business to share registry group Computershare Ltd. (ASX:CPU).
Cape Lambert Iron Ore (ASX:CFE) has signed a conditional agreement to make a 30 per cent investment in Marampa Iron Ore, a subsidiary of African Minerals and owner of the Marampa iron ore project in Sierra Leone. The agreement is a cash/scrip deal valued at more than $US45 million.
Important Corporate News
St George Bank (ASX:SGB) has returned to one of its more traditional sources of funding - the once-cheap home loans investment market - to raise just over A$1 billion towards its estimated A$12 billion financing needs for the current year.
Australian diversified miner Straits Resources (ASX:SRL) yesterday said it was optimistic the demerger of its coal assets into a separate A$2.7 billion spin-off would be finalised by October. Straits executive director Martin Purvis said the decision to distribute its 50 percent stake in Straits Asia to current shareholders via a new Australian Stock Exchange listing arose from the need to create 'more critical mass' for it 'undersized and undercapitalised' metals assets.
St George Bank Limited
Rio Tinto Limited
Cape Lambert Resources Limited
BHP Billiton Limited
Amcom Telecommunications Limited
Aeris Resources Ltd
A.B.C. Learning Centres Limited