Australian shares outlook - Higher after Fed rate cut |
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Wed, 31 Oct 2007 22:59
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SYDNEY (Thomson Financial) - Australian shares are expected to open higher Thursday following the widely expected interest rate cut by the US Federal Reserve overnight.But gains may be limited as the Australian market is close to record highs.'I can't help thinking that we are in for a period of consolidation although all the signs are bright,' said Stuart Smith, a private client advisor at Bell Potter Securities.The S&P/ASX 200 December futures contract ended its overnight session up 54 points at 6,848, indicating a positive start to trading.In the US, the Federal Reserve cut its federal funds target rate by 25 basis points as had been widely expected.The cut restored confidence in the US economy, sending share prices higher.The Dow Jones Industrial Average ended up 137.54 points or 1.0 percent at 13,930.01.News Corp rose 0.7 percent.In the UK, share prices also rose because of the Federal Reserve's rate cut decision.The FTSE 100 rose 62.6 points or 0.9 percent to 6,721.6.BHP Billiton added 0.7 percent to and Rio Tinto advanced 1.9 percent.Crude oil prices rose 4.6 percent to record highs in response to a surprise fall in inventories in the latest week. The December Nymex crude oil contract jumped 4.15 US dollars to 94.53 dollars a barrel.Base metal prices were mixed on the London Metal Exchange on Tuesday ahead of the Federal Reserve decision.The gold price hit fresh 28-year highs of 800.80 dollars as the US dollar slumped due to the Federal Reserve rate cut. At the close the most-active December Comex gold was up 7.50 dollars at 795.30 dollars an ounce.(1 US dollar = 1.07 Australian dollars)bruce.hextall@thomson.com-bhx/ngCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Forex - US dollar mixed against major currencies after strong overnight gains 