Emerging Technology

Market takes a breather: Economy round-up

SmartCompany /

The slide on Australian sharemarkets has slowed somewhat today, thanks to a strong US lead and some positive economic data.

At 12.10pm the S&P/ASX200 was trading at 6068.9, down 0.3% on yesterday’s close of 6087.7. Overnight the US Dow Jones Index gained 1.16% to close at 12735.1.

The stronger performance in the US overnight supported the Australian dollar, which at 12.10pm was trading at US88.49c, up on yesterday’s US88.27c close.

Australian markets followed the US in opening positively, but a lower than expected profit announcement by Alumina and an announcement by Morgan Stanley that they have downgraded their rating of Commonwealth Bank shares triggered a shift to negative sentiment.

The Australian Financial Review also reported this morning that analysts now believe earnings growth by Australian-listed companies on average for 2007-08 will be below 10%, with some setting the figure at 7.2% or 7.5%. This compares with 15.6% in the previous financial year. Factors such as the rising Australian currency, the global credit crisis, fears of a US recession and the breaking-out of staff and material input costs are to blame.

Good news today came in the form of an unexpectedly large fall in the size of Australia’s trade deficit. Australia’s trade deficit in November was $2.25 billion, down $609 million from October.

A strong 6.6% increase in exports in November more than made up for a 2.1% rise in imports. A 4.4% increase in rural exports, 7.6% increase in other goods exports and 0.4% increase in manufacturing exports were the main contributors to the result.

 

Advertisement
SmartCompany

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.

We Recommend

FROM AROUND THE WEB