Sydney, Oct 22, 2008 AEST (ABN Newswire) - Overnight Wall Street slumped in late trading with Dow Jones Industrial Average ended the day down 2.5%.
Australia's benchmark S&P/ASX-200 share index yesterday advanced almost 4% for a second straight session, bringing the two-day increase to more than 8%, as buyers flooded back into big mining companies.
The benchmark S&P/ASX200 index closed 160.26 points higher, or 3.9%, to 4302.5, adding to previous day's 4.3% surge. The broader All Ordinaries index added 152.7 points, or 3.7%, to 4,251.4.
At 6.59am, the December Share Price Index futures contract on the Sydney Futures Exchange was down 125 points, or about 3%, at 4212.
Today the Aussie dollar has opened lower, dropping below $US0.6800 due to a stronger US dollar and falling commodity prices. At 7am AEDT, the dollar was trading at $US0.6755/59, down 1.6 US cents, or 2.3 per cent, from yesterday's close of $US0.6914/19.
Oil prices fell sharply today, with investors shrugging off the possibility of a new OPEC output cut as they focus on slowing global demand. New York's main contract, light sweet crude for delivery in November, tumbled $US3.36 to close at $US70.89 per barrel. The contract expired at the close.
Key Economic Facts and Figures
The Reserve Bank of Australia (RBA) has said it expects the consumer price index for the September quarter to be near 5%, way beyond its 2-3% target. RBA governor Glenn Stevens yesterday said the CPI was likely to remain high for a good six months. Glenn Stevens said that he was confident that inflationary pressures would subside next year following an expected slow-down in domestic demand and a slump in global commodity costs.
RBA minutes at that meeting say the sharply worsening conditions in international markets and the deterioration in the global economic outlook posed downside risks to the domestic economy. Financial markets expect the RBA will cut again by a further half a percentage point when the board next meets on November 4.
M&A News
Futuris(ASX:FCL) is looking for another buyer for its remaining 18.6 per cent stake in telecommunications firm Amcom(ASX:AMM), after Amcom shareholders rejected a proposed buy-back yesterday.
National Australia Bank(ASX:NAB) is believed to be days away from buying one of the country's biggest non-bank lenders, the struggling Wizard Home Loans. It is understood that if NAB takes Wizard's distribution business, which includes an estimated 170 branches, it will pay less than A$100 million for the business and the brand. However, if it negotiates to take its A$12 billion loan book, it will pay significantly more.
Important Corporate News
Shoes, clothing and bed-linen manufacturer Pacific Brands(ASX:PBG) says its 2008/09 result is likely to be flat at best as consumer sentiment remains weak. Pacific Brands reported a 10% rise in annual net profit to A$116.56 million for the 2008 financial year.
Stockland Property Group(ASX:SGP) has foreshadowed a 7 per cent drop in earnings per security this financial year, compared to the year ended June 30, 2008. The company also foreshadowed a lower bottom-line profit because of a continuing decline in property values.
BHP Billiton(ASX:BHP) said its performance in the first quarter of the 2009 financial year was solid, despite the challenges. BHP Billiton said "macroeconomic indicators show that Chinese growth has softened during the quarter, albeit from very high levels", with volatility and uncertainty to continue in the short-term.
Allco Finance Group(ASX:AFG) said the company may not be able to meet a debt repayment schedule agreed with its bankers unless a syndicate of 12 banks extends the repayment schedule for A$666 million in corporate borrowings.
Woolworths Ltd(ASX:WOW) has lifted first quarter sales and maintained its sales growth guidance for the full year. The supermarkets giant reported total sales growth of 9.6 per cent to A$12.82 billion for the 14 weeks ended October 5.
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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