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Aust shares look set to open sharply lower

Chris Hutchings

The Australian share market looks set to follow Wall Street and other equity markets into the red.

The Australian share market looks set to open half a per cent lower as equity indexes around the world turn red including Wall Street despite a brief small rebound.

At 0700 AEDT on Thursday, the share price futures index was down 29 points, or 0.58 per cent, at 5,972.

Global markets have fallen across the board in the offshore session with Asian stocks hit by disappointing manufacturing data out of Japan and China adding to the impact of new Federal Reserve chair Jerome Powell's hawkish comments on the US economy.

European markets were dragged down by concern US interest rates could rise faster than expected following the US central bank boss' comments while the Asian data impacted British mining companies which weighed on the FTSE.

And, lower oil prices weighed on Wall Street which also was heading for a red close despite a brief lift into positive territory.

Shortly before the close, the Dow Jones Industrial Average was down 1.09 per cent, the S&P 500 was 0.44 per cent lower and the Nasdaq Composite was down 0.41 per cent.

Locally, in economic news on Thursday, the Reserve Bank is due to release its Index of commodity prices.

The Australian Bureau of Statistics is expected to release private capital expenditure and expected expenditure data for the December quarter.

Meanwhile the Ai Group's Australian Performance Manufacturing index is set to be released.

No major equities news is expected.

The Australian market on Wednesday closed lower snapping a five-day winning streak as the possibility of accelerated US interest rate rises spooked investors, and market heavyweight Telstra traded ex-dividend.

The benchmark S&P/ASX200 index fell 40.9 points, or 0.68 per cent, to 6,016 points while the broader All Ordinaries index lost 42 points, or 0.68 per cent, to 6,117.3 points.

Meanwhile, the Australian dollar down against the US dollar which has extend the boost derived from the Federal Reserve chair's comments and expectations of more rises in US interest rate than previously anticipated.

The local currency was trading at 77.78 US cents at 0700 AEDT on Thursday, from 77.97 on Wednesday.


One Australian dollar buys:

* 77.78 US cents, from 77.97 on Wednesday

* 83.00 Japanese yen, from 83.48 yen

* 63.75 euro cents, from 63.76 euro cents

* 56.50 British pence, from 56.08 pence

* 107.84 NZ cents, from 107.74 cents


The spot price of gold in Sydney at 0700 AEDT was $US1,318.11 per fine ounce, from $US1,317.80 per fine ounce on Wednesday.


* CGS 4.50 per cent April 2020, 1.9978pct, unchanged

* CGS 4.75pct April 2027, 2.7492pct, unchanged

Sydney Futures Exchange prices:

* March 2018 10-year bond futures contract at 97.225 (implying a yield of 2.775pct), from 97.205 (implying a yield of 2.795pct) on Wednesday

* March 2018 3-year bond futures contract at 97.90 (2.10pct), from 97.89 (2.11pct).

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)