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Australian shares will most likely open lower today, given the weak lead from overseas markets, escalating US-North Korea tensions and flat ASX futures trade.
Market snapshot at 7:30am (AEST):
- ASX SPI 200 futures +0.1pc at 5,705, ASX 200 (Wednesday close) +0.4pc at 5,766
- AUD: 78.85 US cents, 60.60 British pence, 67.04 euro cents, 86.71 Japanese yen, NZ$1.07
- US: Dow Jones -0.2pc at 22,049, S&P 500 flat at 2,474, Nasdaq -0.3pc at 6,352
- Europe: FTSE -0.6pc at 7,498, DAX -1.1pc at 12,154, Euro Stoxx 50 -1.3pc at 3,468
- Commodities: Brent crude +1.2pc at $US52.78/barrel, spot gold +1.3pc at $US1,277/ounce, iron ore flat at $US75.46/tonne
Several Australian companies will release their financial results today, including AMP, AGL Energy and Virgin Australia.
It will be a quiet day for local economic news.
But across the ditch, the Reserve Bank of New Zealand decided to keep interest rates on hold at 1.75 per cent this morning.
It was a move widely predicted by financial markets and, like Australia's interest rates, New Zealand is expected to remain on hold for the foreseeable future.
International tensions spark sell-off
Escalating tensions between the US and North Korea have sparked a global equities sell-down.
Major markets in the US, Europe and Asia finished lower overnight.
Investors shifted away from stocks to safe-haven assets such as the Japanese yen and gold.
They are understandably worried after US President Donald Trump sparked a war of words with North Korea, threatening each other with the use of nuclear weapons.
President Trump said on Tuesday that any threats to the United States from Pyongyang would be met with "fire and fury".
This prompted North Korea to respond by saying it was considering plans for a missile strike on the US Pacific territory of Guam.
US Defence Secretary Jim Mattis then issued a stark warning to North Korea, telling Pyongyang that it should stop any actions that would lead to the "end of its regime and the destruction of its people".
The President boasted in an overnight Tweet, "My first order as President was to renovate and modernize our nuclear arsenal. It is now far stronger and more powerful than ever before."
"Hopefully we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world!"
"The increased tension between the US and North Korea is the factor that is keeping markets on edge right now," according to ANZ Bank's Daniel Been.
"But we think that the underlying setup in the market at the moment is as important as the trigger.
"While Korean tensions could fade, the market remains vulnerable to other surprises."
What happened on Wall Street?
On Wall Street every sector finished in the red, with telecommunications, cyclical goods and services, and basic materials being the worst performers.
Disney stock did not fare very well either — down 3.9 per cent to $US102.83, which is an eight-month low.
Clearly investors did not respond well to Disney's announcement on Wednesday that it would start its own video streaming service and stop providing new movies to Netflix from 2019.
They are concerned that Disney will encounter new hurdles selling directly to consumers.
The company has relatively little experience with selling subscriptions, although it does operate a digital service in Britain called DisneyLife.
It will also have to invest in technology. As part of the plan announced on Tuesday, Disney said it would spend $1.58 billion to acquire majority ownership of BAMTech, the company that streams professional US baseball and will provide the tech powering the new streaming services.
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