Australian shares outlook - Lower on Wall St fall, Macquarie Bank in focus

Australian shares outlook - Lower on Wall St fall, Macquarie Bank in focus

	Published : Wed, 01 Aug 2007 00:25 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australian shares may open lower Wednesday after US markets suffered another selloff as concerns over bad home loans prevailed, causing the Dow industrials to lose nearly 150 points.

'We will have a pitstop on the way up,' said Bell Potter Securities private client advisor Stuart Smith.

He said Macquarie Bank is likely to be sold down following reports that retail investors face losses of

up to 25 percent on two of Macquarie's high-yield funds which are invested in senior secured US

corporate loans.

The S&P/ASX 200 September futures contract ended its overnight session down 33.0 points at 6,090.0 points, suggesting brisk selling at the start of trading.

On Tuesday, Australian shares closed firmer for the second trading day after US and European equity markets recovered following last week's selldown, inspiring bargain hunters to step in.

The S&P/ASX 200 closed up 35.4 points or 0.6 percent at 6,144.2 and the All Ordinaries index rose 41.0 points or 0.7 percent to 6,187.5.

In New York, share prices resumed their downward skid Tuesday, falling sharply as renewed concerns about soured home loans blew away what had looked like a solid recovery rally. The market pulled back after American Home Mortgage Investment Corp said it had not been able to tap into its credit lines and has hired advisers to consider its options, including the sale of its assets.

The Dow Jones Industrial Average closed down 146.32 points or 1.1 percent at 13,211.99.

New Corp shares ended down 0.8 percent as it edged closer to gaining control of Dow Jones & Co, the owner of the Wall Street Journal. The newspaper is reporting that some members of the controlling Bancroft family will now support the five billion US dollar deal.

In London, share prices closed sharply higher following an early rally amid further reassuring earnings news and as US economic data suggested tame inflation and rising consumer confidence.

The FTSE 100 index closed up 154 points at 6,360.1.

BHP Billiton surged 5.0 percent on higher commodity prices and Rio Tinto gained 4.5 percent.

Crude oil prices moved higher on Tuesday, with traders expecting a drawdown in crude oil supplies in the weekly US crude report. The buying momentum pushed the September crude contract to close at a record high, jumping by 1.38 dollars to 78.21 dollars per barrel on the New York Mercantile Exchange.

Base metal prices were mostly higher on the London Metal Exchange. Copper rose 2.5 percent, supported by strike action in Mexico, and lead prices jumped nearly seven percent after breaking through technical resistance levels.

Gold prices rose in response to surging oil prices. The August gold contract rose 2.80 dollars to

666.90 dollars an ounce on the New York Mercantile Exchange.

Ahead in Australia, retail sales and trade data, both for June, are scheduled for release while Alumina Ltd will report its first-half earnings.

(1 US dollar = 1.18 Australian dollars)

bruce.hextall@thomson.com

bhx/ms

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