News: Outlook: US Fed forecast to fire up ASX & AUD

.

The Australian share market looks to lift into the session after Wall St hit new records following the US Federal Reserve’s policy meeting. US investors cheered the central bank’s commentary on America’s economic recovery suggesting interest rates won’t rise until 2015. The S&P 500 hit another record closing high, the Dow climbed almost 100 points and the Nasdaq ended at its highest level in 14 years. Meanwhile traders will also keep a cautious eye on developments in the Middle East as conflict in Iraq heats up. 

 

US economic news 

 

Moving in line with expectations the US Federal Reserve has keep its federal funds rate near zero and confirmed it will continue to taper its monthly bond purchases. The Fed will cut purchases of Treasuries and Mortgage Backed Securities by an extra $US10 billion to $35 billion from July 1. The Fed has also lowered its forecast for US economic growth this year but suggested an ongoing recovery could support raising the currently begin interest rates in 2015.

 

Global markets

 

The Fed’s forecast saw Wall Street snap losses and gain on Wednesday: The Dow Jones Industrial Average gained 98 points to close at 16,907, the S&P 500 gained 15 points to close at 1,957 and the Nasdaq gained 26 points to close at 4,363.

 

European markets closed mixed on Wednesday in cautious anticipation of the Fed’s meeting: London's FTSE 100 rose 12 points, France's CAC 40 lost 6 points and Germany's DAX rose 10 points.

 

Asian markets closed mixed on Wednesday: Japan’s Nikkei added 140 points, Hong Kong’s Hang Seng lost 22 points, and China’s Shanghai Composite lost 11 points.

 

The Australian share market fell to session lows yesterday ahead of the outcome of the US Federal Reserve’s policy meeting: The S&P/ASX 200 index lost 18 points on Wednesday to close at 5,383. On the futures market the SPI is pointing 16 points higher. 

 

Currencies 

 

The Australian dollar has risen against the greenback amid expectations US interest rates won’t rise for some time and at 7:20am the Aussie was fetching $US0.94, 55.35 Pence Sterling, 95.83 Yen and 69.19 Euro cents.

 

Economic news due out today 

 

Reserve Bank of Australia: Quarterly bulletin

 

Company news 

 

ANZ Banking Group’s (ASX:ANZ) GAYTM campaign has been internationally recognised at the prestigious Cannes Lions Festival advertising awards in France. The bank’s campaign ran as part of its sponsorship of Sydney's Gay and Lesbian Mardi Gras and scored top honours in the advertising festival’s outdoor category. Melbourne based advertising agency Whybin\TBWA created the campaign for ANZ which included ten bedazzled and jewel-inspired ATMs across the city. Shares in ANZ Banking Group fell 0.56 per cent to close at $33.74 on Wednesday.  
 

Coal haulage company Aurizon Holdings Limited (ASX:AZJ) and Chinese giant Baosteel have welcomed backing from their takeover target Aquila Resources Limited (ASX:AQA). The recommendation comes after Aurizon and Baosteel last week declared their $1.4 billion takeover offer final and warned it will close on July 11. Aquila threw its support behind the bid yesterday and also told the market its 29 per cent shareholder and Executive Chairman of Mineral Resources Limited (ASX:MIN) Tony Poli also plans to back the offer. Shares in Aurizon Holdings dropped 1.02 per cent to close at $4.84 on Wednesday.  

 

Ex-dividends 

 

Newhaven Hotels Limited (ASX:NHH) paying a 4 cent fully franked dividend

 

Commodities 

Gold has gained $0.70 to $US1,272.70 an ounce for the August contract on Comex. 

Silver has added $0.04 to $19.78 for July. 

Copper has eased $0.001 to $3.06 a pound. 

Oil has pulled back $0.39 to $US105.97 a barrel for July light crude in New York.