BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion
As some favourites start to look expensive, which stocks are tipped to be the new darlings?
- ANZ cautions against chasing loans
- Syd, Melb property to outperform
- Stocks edge into positive territory
- Fairfax shares dive 11%
- Fairfax revenue hit
- Harvey Norman’s tough road ahead
- Market darlings look vulnerable
Welcome to the BusinessNow blog for Thursday, November 3. ANZ Bank has posted its full-year results, while Fairfax shares are in the doghouse after it warned of a revenue slide on sluggish property listings.
8.11pm: France calls for HSBC to stand trial
A French prosecutor has called for British banking giant HSBC Holdings PLC to stand trial for aiding large-scale tax fraud in France, a source close to the investigation said on Thursday.
If the case goes to trial, HSBC would face charges that its Private Banking unit offered its customers several ways of hiding assets from the French taxman, notably via the use of offshore tax havens. AFP
7.32pm: European stocks open lower
European stocks fell further at the start of trade on Thursday, with investors on edge over next week’s presidential election, and before an interest rate decision from the Bank of England.
In initial deals, London’s benchmark FTSE 100 index dipped 0.2 per cent at 6,831.20 points, ahead of the outcome of the BoE’s latest monetary policy meeting at 12.00 GMT (11pm AEDT).
In the eurozone, Frankfurt’s DAX 30 lost 0.3 per cent to 10,341.86 points and the Paris CAC 40 index also shed 0.3 per cent to 4,402.79 compared with Wednesday’s close. AFP
7.22pm:Asian stocks extend losses
Uncertainty over the US presidential election sent Hong Kong stocks falling again on Thursday, extending the previous day’s losses.
The Hang Seng Index shed 0.56 per cent, or 126.99 points, to end at 22,683.51. The benchmark Shanghai Composite Index rose 0.84 per cent, or 26.21 points, to 3,128.94 and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 0.56 per cent, or 11.54 points, to 2,071.59 on turnover of 374.7 billion yuan.
Japanese stocks were closed for a public holiday. AFP
6.58pm:Credit Suisse posts surprise profit
Credit Suisse Group AG reported a surprise profit for the third quarter, as the Swiss bank slashed jobs and curbed expenses as part of its continuing overhaul.
Zurich-based Credit Suisse on Thursday said its net profit in the quarter was 41 million Swiss francs ($US42.2 million), compared with 779 million francs in the same period last year. Net revenue fell 10 per cent, to 5.4 billion francs.
Analysts had expected a net loss of 174 million francs and revenue of 5.1 billion francs in the period.
Credit Suisse began a broad strategic shift under Chief Executive Tidjane Thiam to limit investment banking and focus more on its wealth management businesses roughly one year ago, just as markets were souring and clients began to hold back on investments and trades that can generate fees for the bank. Meanwhile, low and negative interest rates have continued to curb revenue growth for the banking industry more generally, forcing lenders to rely on cost cuts rather than sales increases.
On Thursday, Credit Suisse said total operating expenses rose 2 per cent in the third quarter compared with the same period last year, as the bank incurred costs tied to its restructuring. General and administrative expenses fell 6 per cent, the bank said, while commission expenses fell 23 per cent.
Credit Suisse said it has now cut 5,400 jobs, including contractors, of the 6,000 job cuts planned as part of its restructuring. Overall head count in the quarter fell 1 per cent compared with the same period last year, the bank said. Dow Jones
6.32pm:Is it still ‘one size fits all’ for CEOs?
Glenda Korporaal
The chief executive almost cries at her company’s annual general meeting after a terrible tragedy and gets caned in the media.
As Australia sees the rise of more women at the top of companies, including Ardent Leisure’s chief executive Deborah Thomas, are we uncomfortable — or simply unable to accept different personal styles of leadership? Female leadership.
Do we expect that the CEO of a major public company should be a hard headed superman who takes charge like a military general: full of confidence and certainty about where he is taking the company, clear eyed in the face of tragedies like last week’s deaths of four tourists at Dreamworld.
Is crying — almost breaking down, which Thomas has done several times in the past week — unacceptable for a chief executive?
“Four people have died,” Thomas said, her voice breaking in answer to questions about the AGM considering her bonus. Yes it was a bad look, a very bad look, to be voting on bonuses for the CEO days after the tragedy, but the decision for that lies with the chairman, not the chief executive. Read more.
6.13pm:Vic power price hike ‘won’t be a small one’
When the Hazelwood power plant closes in early 2017 retail electricity prices will rise by less than four per cent - or $1 a week - according to Victorian government modelling.
But other experts suggest prices will jump around 10 per cent in the longer term.
“It’s not going to be a small rise,” Frontier Economics managing director Danny Price said on Thursday.
He cites as an example what happened in South Australia when Alinta closed its Northern Power Station earlier this year.
It provided 8 per cent of SA’s electricity and the shutdown resulted in an initial price hike of 30 per cent that’s settling at “more than 10 per cent”. Hazelwood, by comparison, generates more than 20 per cent of Victoria’s power. Read more.
5.21pm:Aussie firmly higher in late trade
The Australian dollar has jumped, thanks to positive local trade figures and solid Chinese services data.
At 5pm (AEDT), the local currency was at US76.68 cents, up from Wednesday’s close of US76.31c.
CMC Markets chief market analyst Ric Spooner said the Aussie — which has seesawed against the greenback amid uncertainty over the US presidential election in recent days — got a boost from the bigger-than-expected fall in Australia’s trade deficit in September.
“The trade data was important to the Aussie — better than expected on the back of higher prices,” Mr Spooner said.
Australia’s trade deficit dropped sharply to $1.23 billion in September from $1.89bn in August, beating market expectations.
The Aussie also benefited from solid Chinese services purchasing managers index (PMI) data, which showed the services sector growing strongly, Mr Spooner said. AAP
4.15pm:Stocks finish in the red
The Australian sharemarket has edged lower at the close as persistent uncertainty around US politics and interest rate policy was not quite offset by a sudden bounce in crude prices through Asian trade, writes Daniel Palmer.
At the end of trade, the benchmark S&P/ASX 200 index was off 3.4 points, or 0.07 per cent, to 5,225.6, while the broader All Ordinaries index inched down 4.5 points, or 0.08 per cent, to 5,306.5.
The modest red numbers represented the third straight session of falls and took the market to a new seven-week low.
3.30pm:GSK to close Sydney factory
Pharmaceutical giant GSK is set to shut its factory in Sydney’s northwest, impacting 223 jobs, saying it was no longer competitive, writes Sarah-Jane Tasker.
The Australian arm of the British company told employees today that after reviewing its factory in Ermington it had decided it would close by 2020.
The site was mainly used to manufacture panadol, which will now be produced at other GSK sites, including offshore factories.
More to come
2.50pm:Health insurance complaints hit record
A huge jump in complaints about Medibank has fuelled a record number of submissions to the private health insurance ombudsman, with customers fed up with service delays, writes Sarah-Jane Tasker.
The Private Health Insurance Ombudsman, releasing the statistics for the July to September quarter, revealed there was 1683 complaints received during the quarter, which is the largest number of complaints received in a single quarter in the ombudsman’s history. The number was a 60 per cent jump on the same period last year.
2.29pm:Shares, dollar slide on election jitters
Australian shares and the dollar have erased intraday gains amid US election jitters.
The S&P/ASX 200 share index has fallen from 5241 to 5226, while the Aussie dollar has slipped from US76.785c to to US76.37c.
That drop coincided with MXNJPY falling as much as 1.2 per cent to a four-week low of 5.2704.
Meanwhile, USDMXN hit a four-week high of 19.47.
The market is clearly still worried about a potential Trump victory.
Nothing new on the US election front today, although Clinton is speaking in Arizona.
2.06pm:The next market darlings
Credit Suisse has spruiked a new breed of market darlings as some of the longtime favourites of investors’ trade at values well above their peers overseas, writes Daniel Palmer.
The investment bank’s prominent local market strategist Hasan Tefvik warned Australia’s hottest stocks were trading at levels seen only once before in history, leaving them prime for a fall and opening the door to some new options including petrol retailer Caltex and BHP spin-off South32.
“Australia has the most expensive market darlings in the world,” he said.
“Our darlings trade on a forward PE of 38 times. By comparison the darlings in the US trade on a mere 25 times.
“There has only been one other time in the last 20 years when Aussie darlings have been more expensive. And that did not end well for the shareholders.”
Mr Tevfik said buying market darlings with price to earnings ratios above 30 times had not proven a “profitable investment strategy” historically.
Credit Suisse tagged Caltex, Eclipx, Mayne Pharma, Nufarm, Star Entertainment and South32 as potential new market darlings given their strong balance sheets, management and profit margins.
1.20pm:ACCC flags DuPont-Dow concerns
The proposed $160 billion tie-up of US chemical giants DuPont and Dow Chemical has stirred concern with Australia’s competition watchdog as antitrust regulators around the world threaten to derail the deal, writes Daniel Palmer.
The Australian Competition and Consumer Commission today released a statement of issues on the planned merger, noting fears competitive tensions for a number of important agricultural products could be eroded.
“The ACCC is concerned about the effect that the proposed merger may have on competition for a diverse range of products, including insecticides, seeds, and materials science products,” chairman Rod Sims said.
12.34pm:Investors back Inghams’ repriced IPO
Inghams Enterprises’ repriced initial public offering is understood to have drawn a strong level of support from prospective investors, with most of the bids from retail brokers being scaled back.
It is now understood that about $200m worth of stock has been allocated to retail investors, with large orders from two institutions for about $50m worth of stock each and a $150m commitment from Australian Super.
Earlier, it was expected retail investors would account for as much as $350m, prompting some to question whether vendor TPG Captial would proceed with the listing.
It comes after TPG yesterday repriced the IPO for the poultry producer to 12 times its forecasted annual earnings, taking its market value to just under $1.2bn and the raise size close to $600m.
Shares are being sold at $3.15 each for the listing on November 7, with the bookbuild concluded today.
Sources close to the deal said the book was almost four times covered.
Bridget Carter
12.30pm:ANZ cautions against chasing loans
ANZ chief Shayne Elliott has warned it is a “time to be more cautious” about chasing loans as the bank put its $4.5 billion wealth arm on the block for sale and shrank its balance sheet, feeding into an 18 per cent slide in annual profit.
In a messy result marred by writedowns and charges from the group’s restructuring efforts that included shedding 3598 jobs, ANZ today reported a $5.8bn cash profit for the year to September 30, down 18 per cent but in line with analysts’ watered down expectations.
Michael Bennet
12.15pm:Syd, Melb property set to outperform: NAB
Australian housing market sentiment improved through the third quarter, with the persistent strength of the sector forcing National Australia Bank to upwardly revise its price growth forecasts, writes Daniel Palmer.
The NAB Residential Property Index — which assesses the views of 240 property professionals — improved to +15 from +3 in the third quarter, with sentiment rising in all regions beyond South Australia and Northern Territory.
New South Wales and Victoria unsurprisingly led the way as an east coast boom driven by the most populous cities of Sydney and Melbourne shows no significant signs of slowing.
Indeed, such is the confidence in the two state capitals that they were home to 10 of the 14 suburbs tagged as those most likely to outperform the broader market by those surveyed.
12.00pm:WCB swings to profit
Dairy group Warrnambool Cheese and Butter has swung to profit in the first half due to lower costs and a weaker Australian dollar, writes Daniel Palmer.
Normalised net earnings after tax for the six months to September 30 were reported at $12 million, a strong improvement on the loss of $1.2m in the corresponding period last year.
“The increase in normalised NPAT is due to improved returns from the company’s consumer goods business and joint ventures, realigning raw milk cost with market conditions and a lower average Australian dollar,” WCB said in a statement.
11.20am:Stocks edge into positive territory
Australian stocks have just peeked into positive territory for the first time today as investors applaud what, at first glance, appeared to be a weak full-year profit result from ANZ and jump aboard the still-surging Domino’s Pizza.
At 11am AEDT the S&P/ASX 200 was on the positive side of flat ground at 5229 points after falling as much as 0.5 per cent at the open.
The nation’s third-largest bank announced an 18 per cent slump in cash profit to a five-year low, but investors had prepared themselves for the negative headlines and are now focusing on the positives. See our 10.24am blog post for more detail.
Meanwhile, Fairfax is being hammered by investors, with its 8 per cent fall making it the worst performer on the ASX 200 today. The company’s half-year earnings are expected to be lower as its Domain business slows.
Elsewhere Domino’s Pizza is up 5.6 per cent after Morgan Stanley hiked its 12-month price target by $15 to $95.
Blue chips started the session weak but have since tiptoed higher, with BHP Billiton gaining 0.7 per cent, Rio Tinto lifting 0.2 per cent, Westpac adding 0.1 per cent and Telstra increasing 0.3 per cent.
11.13am:JPM advised South32 on Peabody mine buy
JPMorgan advised South 32 on its $US200m acquisition of Peabody Energy’s Metropolitan coal mine, sources said today.
The deal was announced by South32 earlier today.
Peabody Energy has been working with Lazard as part of a move to sell at least two Australian coal mines as its parent company in the US wrestles with Chapter 11 bankruptcy.
Bridget Carter
10.44am:Stocks slide on Fed, US election jitters
The Australian sharemarket is on track for a third day of falls as it followed Wall Street lower amid growing expectations of a US rate hike and uncertainty around the US election.
At 10.25am (AEDT), the benchmark S&P/ASX 200 index gave back 12 points, or 0.23 per cent, to 5,217, while the broader All Ordinaries index skidded 13.6 points, or 0.26 per cent, to 5,297.4.
The energy sector lagged in morning trade after another weak session for crude offshore, while the banks outperformed as investors welcomed a mixed full-year result delivered by ANZ.
Investors also eyed the latest update from the US Federal Reserve early this morning, which revealed a central bank willing to tighten policy in the near future.
The prospect of a Donald Trump election victory could cast a shadow on plans for a December hike, however.
10.31am:Broker rating changes
CSR raised to Hold vs Lighten — Ord Minnett
Reliance Worldwide raised to Accumulate vs Hold — Ord Minnett
10.31am:Fairfax shares dive 11%
Fairfax Media shares have slumped 11 per cent to 72c, the lowest level since February 2014.
This follows news that revenue for continuing businesses has plunged as much as 7 per cent for fiscal year 2017 so far.
The company’s growth engine, Domain, has suffered from a sluggish property listings market, with investment in the real estate division also hitting the bottom line.
At its annual general meeting, Fairfax will say Domain’s first-half EBITDA is expected to be lower than in the previous corresponding period as the key Sydney and Melbourne markets endure a hangover from the marathon federal election campaign.
New listings volumes to the end of October were down by 18 per cent in Sydney and down by 5 per cent in Melbourne.
FXJ shares were last down 8.3 per cent at 74c.
10.24am:ANZ result shows turnaround momentum
ANZ’s full-year results were slightly soft on a pre-tax basis but the bank has showed good turnaround momentum, according to Watermark Funds Management.
Cash earnings were in line with consensus expectations, which were lowered about 5 per cent after higher charges announced last week.
Underlying profits missed expectations by 1 per cent due to higher expenses, while pre-tax profit missed expectations by 2 per cent, with cash earnings supported by a lower tax rate.
“Pleasingly, ANZ exhibited positive jaws in the second half with revenues growing by 0.6 per cent while costs remained flat,” Watermark analyst Omkar Joshi says.
“Similar to peers, the margin was under pressure due to rising funding costs which was partially offset by repricing in Australian mortgages.”
He says ANZ’s plan to sell parts of it wealth business could help to release capital and therefore lift returns.
And it has continued to reduce its risk weighted assets in its institutional business with a further $14bn reduction in the second half.
“This discipline in reducing risk weighted assets has helped deliver a stronger capital outcome than expected with CET1 coming in 20bps higher than expected,” Joshi says.
Bad debt charges rose 13bps over the year to 34bps of the full year but this was 12bps lower than consensus, he adds.
But, of some concern, new impaired assets have continued to increase and rose 3 per cent in the second half, while total impaired assets also increased by 10 per cent and past due loans lifted by 15 per cent in the second half.
Joshi says ANZ’s guidance for a dividend payout range of 60-65 per cent of cash earnings appears pragmatic.
ANZ shares have turned up 0.4 per cent to $27.29 after an early fall to $26.83.
10.15am:Dip in property listings hits Fairfax revenue
Fairfax Media’s revenues for continuing businesses have plunged by 6 per cent to 7 per cent for fiscal year 2017 so far, as the company’s growth engine, Domain, suffered from a sluggish property listings market, with investment in the real estate division also hitting the bottom line.
At its annual general meeting, Fairfax will say Domain’s first-half earnings before interest, tax, depreciation and amortisation are expected to be lower than in the previous corresponding period as the key Sydney and Melbourne markets endure a hangover from the marathon federal election campaign.
Jake Mitchell
10.02am:It’s about to get tough for Harvey Norman
“Life is about to get harder for Harvey Norman”, according to Morgan Stanley, which says the current trading multiple looks full and earnings growth will soon fade.
The benefit of Dick Smith’s downfall to Harvey Norman has now worked its way through and earnings growth will fade as a result.
“Fiscal 2016 represented a solid year of sales and earnings growth as Harvey Norman benefited from its exposure to furniture and bedding as well as a more rational electronics market as a result of the demise of Dick Smith, whose issues, we would argue, began before its announced administration in January 2016,” Morgan Stanley analyst Thomas Kierath said.
“We attribute a considerable part of the significant profit uptick in 3Q16, 4Q16 and 1Q17 to the demise of Dick Smith and a benign competitive environment. However, as Harvey Norman starts to lap the period when Dick Smith’s sales started to slow (we estimate this was October), we believe like-for-like sales growth and group profit growth will slow too.”
Morgan Stanley leaves its rating as underweight and maintains its $4.70 price target.
Analysts, more broadly, are split on Harvey Norman, with Bloomberg data showing four ‘buy’ ratings, three ‘holds’ and six ‘sell’ recommendations.
Worth noting is that UBS analyst Ben Gilbert has a buy on the stock and $5.70 price target.
The stock has gained 18 per cent in the year to date, last trading at $4.93.
9.58am:Morgan Stanley’s new target for Domino’s
Morgan Stanley has boosted its target on Domino’s Pizza to $95 from $80, while reiterating its Overweight rating.
“A greater investor focus on sustainability of the DMP model leads us to assess franchisee and corporate profitability — we remain confident both will grow significantly ahead,” MS analyst Thomas Kierath says.
“The European growth runway remains long and is a key value driver. Our recent trip to Germany and France gives us confidence DMP will have more than 1,000 stores in the longer term.”
DMP shares dived as much as 8.8 per cent to a 6-month low of $58 yesterday before closing down 3.2 per cent at $61.55.
9.43am:Market darlings look vulnerable
Australia has the most expensive sharemarket “darlings” and they are vulnerable to higher bond yields and the end of a “profits recession”, according to Credit Suisse.
“History shows that by buying darlings above 30 times (one-year forward forecast) PE has not been a profitable investment strategy in Australia,” says Credit Suisse strategist Hasan Tevfik.
“Anyone considering a blanket buy of Australia’s most loved stocks should treat it as a trade, not an investment,” he says.
“A rising discount rate will be bad for these long duration, highly valued assets. Meanwhile as the scarcity of growth diminishes, with a recovery in market earnings, the growth premium currently embedded in the darlings should also diminish. Our darlings are set to de-rate further, in our view.”
Mr Tevfik says investors should buy potential favourites with strong balance sheets, large profit margins and well as strong management.
Some of the larger companies in that group include WES, CSL, SCG, AGL, GMG, RMD, JHX, S32, CGF, SEK, BKL, CRZ, CTX, REA, ABC, SGR, NUF and APO.
Some of the current market darlings include TCL, SYD, COH, TWE, DMP and ACX, according to Tevfik.
9.37am:Broker rating changes
James Hardie raised to Neutral vs Underweight — JPMorgan
Nine Entertainment raised to Outperform vs Neutral — Credit Suisse
Reliance Worldwide raised to Overweight vs Neutral — JPMorgan
Technology one raised to Hold vs Sell — Bell Potter
Whitehaven raised to Outperform vs Underperform — Credit Suisse
Virgin Australia cut to Sell vs Neutral — UBS
Brambles raised to Buy vs Hold — Shaw & Partners
Scentre Group raised to Hold vs Sell — Shaw & Partners
9.27am:Boral suffers ‘challenging’ start to FY17
Boral managing director Mike Kane has said the building and construction materials group endured a more challenging start to fiscal 2017 than expected, but expects a strong second half to push earnings above the prior year, writes Daniel Palmer.
In a speech to be delivered to the company’s AGM in Sydney this morning, Mr Kane said a wet spring in Australia and a hard landing in Western Australia had made a dent in its first quarter results despite east coast housing activity remaining “strong”.
“While we have seen softness in South Australia in line with expectation, the Western Australian market has come off a little harder than we thought it would,” he said.
9.13am:Why market bears are swarming
Global sharemarkets are nervous as a series of investment and economic analysts with good track records warn of dangers ahead, Robert Gottliebsen writes.
That why last night the S&P 500 in New York staged its sixth successive decline (albeit small) and London and Germany were both down around 1.5 per cent.
There are two separate but connected bearish forces, one closely linked to Brexit and the other to a possible Trump win. So, let’s look at what the bears are saying and then test the validity of their analysis.
Keep reading
8.48am:‘Buyers strike’ stalling ASX growth
Australian stocks look set to see another uninspiring session today, with US election worries weighing on global markets, ANZ missing the mark and commodity prices remaining under pressure.
The SPI 200 is pointing to a 0.3 per cent fall on the local market, but fair value suggests a 0.6 per cent drop is more likely.
A slide of that size would see the index challenge its September low and potentially find itself at its worst position in almost four months.
With the market closing below the 200-day moving average yesterday, plenty in the market are now worried further falls are on the way.
ANZ could find itself on the outer today after announcing a substantial 3 per cent miss to full-year earnings expectations.
Resources stocks will be in focus, with the price of WTI oil giving up another 2.5 per cent to $US45.51 — it has now lost 8.7 per cent in four days. Meanwhile the iron ore price held flat overnight at $US65.31.
IG chief strategist Chris Weston said clearly gold stocks are looking good in this market, as investors watch and wait.
“We have reached a point where there is a buyers strike, where money managers have reduced their risk, increased cash allocations within the portfolio and happy to ride out this mini-storm of uncertainty,” Mr Weston said.
“This is a perfect breeding ground for short sellers who love the combination of uncertainty and lack of bids.”
8.11am:ANZ earnings tumble 24 per cent
ANZ has seen its earnings slide by around a fifth in fiscal 2016, weighed by impairments and lower margins, Daniel Palmer writes.
For the year to September 30, the bank booked a 24 per cent drop in net earnings to $5.7 billion, while the more closely-watched cash profit number fell 18 per cent to $5.9bn.
The cash earnings figure came in shy of analyst projections for a reading of $6.07bn.
“This year we delivered another good performance in Australia and New Zealand with our consumer and small business franchises producing strong results based on a disciplined approach to market share and tight cost management,” chief executive Shayne Elliott said.
Read more
7.10am:ASX set to open lower
The Australian sharemarket looks set to open lower after Wall Street fell again amid election jitters and following the US Fed’s decision to keep rates on hold but to signal it could hike in December.
Oil prices also extended their slump overnight, falling nearly 3 per cent.
At 6.45am (AEDT), the share price index was down nine points at 5,175.
US stocks remained pressured by uncertainty over the impending US elections with signs that Republican candidate Donald Trump was closing the gap with rival Democrat Hillary Clinton.
Locally, in economic news, the Australian Bureau of Statistics releases September international trade in goods and services data while the Australian Industry Group Australian Performance of Services Index (PSI) for October is also due out.
In equities news, ANZ is expected to post full-year results, as is BT Investment Management.
Fairfax Media, Downer EDI and Boral have their annual general meetings.
In Australia, the market yesterday closed more than one per cent lower amid increased jitters over the US presidential election.
The benchmark S & P/ASX200 index fell 61.5 points, or 1.16 per cent, to 5,229 points.
The broader All Ordinaries index lost 64.2 points, or 1.19 per cent, to 5,311 points.
AAP
7.00am:Iron ore holds at 6-month high
The iron ore price has held steady at a six-month high as analysts warn the recent rally is driven by euphoria rather than fundamentals, Elizabeth Redman writes.
Iron ore was unchanged at $US64.40 a tonne overnight, according to The Steel Index, its highest point since settling at $US65.20 on April 29.
6.55am:Dollar rises
The Australian dollar is higher against the US dollar, which has weakened as investors shun risk amid signs the US presidential race is tightening.
The rise also followed stronger US Fed hints of a rate rise next month.
At 6.35am (AEDT), the local unit was trading at US76.58 cents, up from US76.31 cents yesterday.
The US dollar slipped amid increasing uncertainty over the outcome of the race for the White House amid signs Republican Donald Trump could be closing the gap with rival Democrat Hillary Clinton.
AAP
6.50am: Oil slumps on bearish report
Oil prices extended their slump after data showed the biggest weekly US crude surplus on record, the latest sign of the hurdles facing traders banking on higher prices.
The supply data prompted investors to reduce expectations that two years of oversupply in the oil markets is coming to an end. US prices immediately shed nearly $US1 a barrel and losses spread into gasoline and diesel futures.
Dow Jones
6.45am:Wall St slips amid election jitters
A decline in energy shares helped carry US stocks lower, a day after concerns about the US presidential election helped send the S&P 500 to a sixth consecutive session of declines.
Stocks extended their losses slightly after the Federal Reserve left interest rates unchanged at the conclusion of its November meeting, as expected, and sent new hints it expects to raise rates in December.
In Europe, stocks sank as investors worried about the possibility of a Donald Trump presidency.
Dow Jones
6.40am:Fed hints at December rate hike
The US Federal Reserve has offered its strongest signal yet that it is preparing to raise interest rates in December, a full 12 months after it first lifted monetary policy out of crisis-era emergency settings, Elizabeth Redman writes.
The central bank left rates unchanged at its November meeting but pointed to strengthening inflation, an issue that has made the Fed hesitant to move even as the unemployment rate has fallen steadily.
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Trump’s trade war tariff thaw
In a thawing of relations, the US will delay raising tariffs on Chinese goods after “substantial progress” in trade talks.
China puts heat on coal miners
Shares in pure-play coal miners pared early sharp losses as fears of China port ban eased throughout the session.
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