Economy

Shares open lower as United States government prepares for shutdown: Midday Roundup

Patrick Stafford /

The Australian sharemarket has opened 1.2% lower this morning, as the ongoing tension regarding the imminent shutdown of the United States government continues to boil.

The US government will likely shutdown as neither Democrats nor Republicans have been able to reach a compromise on increasing the debt ceiling.

The benchmark S&P/ASX200 index was down 54 points or 1% this morning to 5252.3 at 11.20 AEST. Last week, the Dow Jones Industrial Average ended the week down 70 points or 0.5% to 15,252.

The markets are also anticipating tomorrow’s Reserve Bank meeting, at which the board is expected to keep the official interest rate steady.

The Australian dollar fell below US93 cents after the markets opened.

Inflation gauge rises in September

A private inflation gauge increased during September, rising 0.2% and giving the RBA further scope to cut the official interest rate if needed.

The TD Securities/Melbourne Institute Monthly Inflation Gauge rose 0.2% in September, after a 0.1% rise in August and an increase of 0.5% in July.

“We forecast underlying inflation to rise by 0.5% in the quarter, for an annual rate of 2.1%,” TD Securities head of Asia-Pacific research Annette Beacher said in a statement.

“Although early signs of a pass-through of the weaker currency into imported prices are apparent and bear close watching.”

Funtastic full-year profit increases

Funtastic has increased its full year net profit by 33% to $13 million, although total revenue has fallen 2.4% to $166 million.

Chief executive Stewart Downs said the result was solid given current retail conditions.

“Both our domestic businesses, Funtastic Australia and Madman Entertainment, have become solid and reliable contributors and we are excited by our Funtastic brand’s growth,” he said.

The company will pay a fully franked dividend of 0.5 cents to shareholders.

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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