Sydney, Oct 15, 2008 AEST (ABN Newswire) - Yesterday, the Australian share market ended almost 4% higher in its best two-day gain since 1975, adding $42 billion to the value of stocks listed in the All Ordinaries index. As confidence was buoyed, investors rushed back to the big miners and banks and pushed the two-day rally to 9% in total. The benchmark S&P/ASX200 index was up 154.5 points, or 3.7%, at 4335.2, while the broader All Ordinaries index gained 169.6 points, or 4.09%, to 4311.5.
At 6.53am, the December Share Price Index futures contract on the Sydney Futures Exchange was down 106 points at 4298.
Wall Street declined overnight as some traders sold shares to take advantage of the huge gains of the previous two days. Australian shares are treading water this morning. In early trade, the benchmark S&P/ASX 200 index was down 0.6%, or 25.6 points, to 4309.6.
The Australian dollar opened lower as a slightly weaker Wall Street saw risk-related currencies sold off overnight. At 7am, the Australian dollar was trading at $US0.7017/21, down from yesterday's close of $US0.7106/11.
On Tuesday, New York's main contract, light sweet crude for delivery in November, closed down $US2.56 at $US78.63 in New York.
Key Economic Facts and Figures
The Legatum Institute's Prosperity Index of 104 nations measures the material health of a country, including wealth, quality of life and life satisfaction. Australia has topped the rankings in a prosperity index of more than 100 countries, with its quality of life and economic strength pushing it into number one spot. The financial crisis-racked United States was rated equal fourth, alongside Germany and Singapore.
The National Australia Bank's (NAB) index of overall business conditions rose 2 points in September to a reading of -1. The survey's measure of business confidence, however, slipped 1 point, to leave it at a low -8. Business conditions were 21 index points below its recent peak of October 2007. The survey found employment conditions had declined in September, with businesses reporting some modest job losses.
The Prime Minister said yesterday that A$10.4 billion would be taken from this year's A$22 billion Budget surplus to fund the pensioners, families and first-homebuyers program and more might be spent if needed to prevent Australia plunging into recession.
In economic news, Westpac and the Melbourne Institute release their leading index of economic activity for August.
M&A News
Takeover target Incremental Petroleum(ASX:IPM) declared yesterday that shareholders controlling 13.5 per cent of its equity had rejected the hostile bid. The company says the proposal from Cooper Energy(ASX:COE) simply does not make sense for their shareholders and Incremental has better prospects pursuing its current growth opportunities with its current sources rather than accepting this offer.
Coogee Resources(ASX:CGR) CEO Gordon Martin yesterday put his 60 percent stake in the company up for sale. Mr Martin said he was a reluctant seller but that bidders for Babcock & Brown's(ASX:BNB) 35 percent holding in Coogee had expressed a desire to buy the company as a whole.
Home loan provider Firstfolio Ltd(ASX:FFF) says it has entered a 45-day period of exclusive negotiations on the possible acquisition of NSW-based Domain Financial Services. Firstfolio says a successful acquisition of Domain Financial Services will lift the value of the Firstfolio mortgage loan book above A$11.5 billion.
Important Corporate News
Commonwealth Bank of Australia(ASX:CBA) said it was dropping its rates on fixed mortgages across the board by between 0.7 per cent and 1.55 per cent for new customers, effective from Monday October 20. Australia's largest home lender made the move on Tuesday after NAB(ASX:NAB) announced last Thursday it would reduce interest rates on fixed mortgages by up to 1.6 per cent. Westpac(ASX:WBC) dropped its rates on fixed home loans on Monday by up to 1.1 per cent.
Watpac Ltd(ASX:WTP) reports its property division has officially concluded its investments in the childcare sector with the recent sale of the last childcare centre in Wanneroo, Western Australia. The centre was sold to RC Watson Property Pty Ltd for A$1.5m as part of an unconditional contract.
The executive chairman of Harvey Norman(ASX:HVN), Gerry Harvey, says his stores' sales in the past month were the worst he has seen, and he expects his company will suffer a 20 per cent drop in profits this year. He added that prices of most products sold in stores would rise in coming months because of the falling Australian dollar.
Contact
Michelle Liang
Asia Business News Aisa Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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