Markets tipped to take a slide

AUSTRALIA'S sharemarket is tipped to drop nearly 1 per cent when it opens this morning after US and European markets suffered big falls on Friday.

AUSTRALIA'S sharemarket is tipped to drop nearly 1 per cent when it opens this morning after US and European markets suffered big falls on Friday.

The S&P/500 dropped 1.6 per cent and the Dow Jones shed 1.5 per cent after a raft of disappointing profit results and trimmed forecasts spooked US investors.

The Nasdaq lost more than 2 per cent after the world's biggest company, Apple (down 3.6 per cent), and its rival Microsoft (down 2.9 per cent) were caught up in a tech stock rout.

European stocks shed 1.2 per cent in value after the region's leaders appeared to make little progress at a summit of leaders in Brussels.

"In a celebrated instance of kicking the can down the road, the EU summit appears to have delayed any difficult decisions on the Euro banking union until next year," a UBS economist, Paul Donovan, said.

"President [Francois] Hollande of France suggested that a troika deal on Greece was within reach. This is a supreme statement of the obvious. Greece cannot leave the euro without threatening euro breakup, so Greece is in a strong position. Troika negotiations are all spin, not substance."

The Australian futures market was yesterday pointing to a 0.99 per cent fall on the local bourse today.

Meanwhile, the Reserve Bank's assistant governor, Guy Debelle, is to deliver a speech to the Australian Securitisation Forum this afternoon.

Market watchers are also awaiting the release on Wednesday of inflation figures for the September quarter.

The figures are tipped to show a rise in the annual inflation rate, adding impetus to the case for another rate cut next month.

The federal government is expected to release today its mid-year economic and forecasting outlook. With AAP

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