Sydney, Oct 30, 2008 AEST (ABN Newswire) - The US Federal Reserve cut its key lending rate a half point overnight to 1.0 per cent in the latest move to ease a credit crisis. The cut in the federal funds rate followed an emergency half-point cut earlier this month coordinated with other central banks to help ease a worldwide credit crunch.
Yesterday Australian shares closed higher for the first time in six days. At the close, the benchmark S&P/ASX200 share index was up 1.3%, or 51 points, to 3845.6, after earlier advancing more than 4.8%. Analysts said the market could continue to fall until a few basic fundamentals such as US housing sales, interbank lending, and commodity prices improve.
In recent trading, the December Share Price Index futures contract on the Sydney Futures Exchange was up 33 points, or about 1.6% higher, at 3,881.
Higher overnight commodities prices may also give a boost to the mining sector in Australia market, as well as Aussie dollar. Today the Australia dollar opened 4.7 per cent firmer as key commodity prices posted double-digit rises. At 7am (AEDT), the dollar was trading at $US0.6705/14, up US3c from yesterday's close of $US0.6406/13.
Oil prices surged overnight, ending a four-session losing streak as the market was buoyed by a global stock market rally, a US interest rate cut and weaker than expected US energy stockpiles. New York's main contract, light sweet crude for December delivery, leapt $US4.77 to close at $US67.50 a barrel.
Key Economic Facts and Figures
Reserve Bank of Australia (RBA) Deputy Governor Ric Battellino said the country's high level of inflation could limit room for manoeuvre on interest rates. Investors have assumed it would cut the cash rate by at least 50 basis points at its monthly policy meeting next Tuesday, and take rates to 5% by Christmas. The RBA expects household incomes to be more subdued over the next two years, as the global financial crisis impacts and the economy slows.
The Department of Education, Employment and Workplace Relations (DEEWR) skilled vacancies index in October dropped 8.8 per cent seasonally adjusted in October from the previous month. The skilled vacancies index in October was 78.4 points in trend terms, 22.2 per cent lower than October 2007.
JP Morgan Australia chief economist Stephen Walters said Australia could tip into a shallow recession in early 2009 as a slowing global economy reduces demand for the mineral exports. The investment bank forecasts Australian GDP growth of 0.7 per cent in 2009, down from 1.4 per cent, already downgraded last week from 1.8 per cent.
M&A News
Foster's(ASX:FGL) has extended its timetable in reviewing its underperforming wine business by almost two months. Speculation has also been circulating in recent months of a hostile takeover of Foster's by the international beer giants including InBev, SABMiller and Heineken.
Energy company AGL(ASX:AGK) is to sell all of its gas and oil exploration and production assets in Papua New Guinea to an unidentified international buyer for a net A$1.1 billion. AGL did not disclose the purchaser and said it was "confidential at this stage", was "an international oil and gas company".
The competition watchdog ACCC says it will not intervene in the acquisition of West Australian Newspapers Holdings Ltd (ASX:WAN) shares by its largest shareholder and suspected predator, Seven Network Ltd. WAN and many media industry analysts believe Seven is planning a full-blown takeover.
Important Corporate News
Qantas Airways(ASX:QAN) says corporate and leisure travel bookings have fallen in the financial crisis, but its budget airline Jetstar is relatively unscathed. The company said the decline in the Australian dollar was likely to drive up demand from tourists coming to Australia, but the airline had not seen that come through yet.
Westpac Banking Corp(ASX:WBC) has posted a rise in full year earnings on the back of strong loan and deposits growth. Net profit for the year ended September 30 rose 11.8 per cent to A$3.859 billion, as revenue grew by 12.3 per cent to A$11.420 billion.
Newmont Mining Corporation (ASX:NEM) net income on a GAAP basis fell 50.6pc to $US196m or US43c per share in the third quarter from $US397m (US88c per share) for the same period last year. Revenues fell 14.2pc to US$1.39bn from US$1.62bn.
Steelmaker Bluescope Steel(ASX:BSL) says it has had a "strong" first quarter, but the second half of fiscal 2009 would be challenging. It had made underlying net profit of approximately A$430 million in the first quarter of fiscal 2009.
1. Related Stocks - Mid Market (AEST 12:30)
------------------------------------------------------Code % Change Volume Turnover Low High------------------------------------------------------ASX:FGL +3.87 5,355,335 $29,640,844 547 569ASX:AGK +.58 849,335 $11,888,929 1373 1437ASX:WAN -6.75 495,056 $2,977,840 570 646ASX:QAN -.4 2,137,025 $5,271,430 244 251ASX:WBC -.09 6,139,808 $124,536,869 1999 2075ASX:NEM -1.55 4,037 $15,442 380 391ASX:BSL +7.16 1,922,327 $8,188,375 406 440ASX:SEV +9.96 227,866 $1,334,989 562 608
2. Top 10 ASX on Turnover - Mid Market (AEST 12:30)
------------------------------------------------------Code % Change Volume Turnover Low High------------------------------------------------------ASX:QGC 28,610,190 $164,515,480 575 576ASX:BHP +5.96 5,879,139 $160,891,063 2705 2790ASX:WBC -.04 6,149,302 $124,729,092 1999 2075ASX:NAB +4.07 4,118,265 $97,403,948 2316 2402ASX:CBA -.49 2,140,313 $85,740,288 3962 4068ASX:RIO +6.64 1,063,501 $81,277,546 7368 7549ASX:TLS +1.73 17,638,368 $72,002,478 405 410ASX:ANZ +.29 3,599,666 $61,936,396 1702 1745ASX:WPL +7.71 1,261,604 $51,140,546 3919 4120ASX:WOW +2.91 1,624,500 $43,890,626 2677 2728
Contact
Michelle Liang
Asia Business News Aisa Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
------------------------------------------------------Code % Change Volume Turnover Low High------------------------------------------------------ASX:QGC 28,610,190 $164,515,480 575 576ASX:BHP +5.96 5,879,139 $160,891,063 2705 2790ASX:WBC -.04 6,149,302 $124,729,092 1999 2075ASX:NAB +4.07 4,118,265 $97,403,948 2316 2402ASX:CBA -.49 2,140,313 $85,740,288 3962 4068ASX:RIO +6.64 1,063,501 $81,277,546 7368 7549ASX:TLS +1.73 17,638,368 $72,002,478 405 410ASX:ANZ +.29 3,599,666 $61,936,396 1702 1745ASX:WPL +7.71 1,261,604 $51,140,546 3919 4120ASX:WOW +2.91 1,624,500 $43,890,626 2677 2728
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