Sydney, Nov 6, 2008 AEST (ABN Newswire) - Overnight US stocks slumped more than 5% as investors worried about the global financial crisis and a US recession, wiping out the gains from the Election Day rally as the problems facing US President-elect Barack Obama dimmed optimism on Wall Street.
The Australian share market closed almost 3% on Wednesday with strong gains in resources stocks, as commodity prices surged. The US presidential election results probably also gave the Australia market a push yesterday, but analysts said overall the focus was the financial credit mess and the volatility hasn't fully passed.
The benchmark S&P/ASX200 index was 121.5 points, or 2.9%, higher at 4336.6, while the broader All Ordinaries gained 117.5 points, or 2.8%, to 4287.3.
In recent trading, the December Share Price Index futures contract on the Sydney Futures Exchange was down 121 points at 4244.
The Aussie dollar has opened marginally firmer as further weak data on the US economy offset lower commodity prices to lift the currency. At 7am AEDT, the dollar was trading at $US0.6922/28, up from yesterday's close of $US0.6915/19.
Oil prices tumbled as US data showed demand falling in the world's biggest energy consumer, highlighting worries about the slowing global economy. On the New York Mercantile Exchange, light sweet crude for December delivery dropped $US5.23 a barrel to close at $US65.30 on Wednesday.
Key Economic Facts and Figures
Australian building approvals fell 7.2 per cent in September, the Australian Bureau of Statistics said yesterday. It was the lowest level since April 2001. In the year to September, building approvals were down 21.6 per cent.
In its Mid-Year Economic and Fiscal Outlook released yesterday, the Treasury says the unemployment rate will rise to 5.75 per cent by June 2010, up from a previous forecast of 4.75 per cent.
Today the Australian Bureau of Statistics releases labour force data for October.
M&A News
Incremental Petroleum(ASX:IPM) has effectively urged shareholders to reject Texan oil man Malone Mitchell's A$84 million cash takeover offer after admitting the bid was "inadequate". Incremental has already used KPMG's original valuation to reject Cooper's(ASX:COE) bid. Yesterday the company published a revised KPMG valuation, downgrading its target from A$3.39-A$4.18 to A$2.41-A$3.05 in light of a slumping oil price and the weaker Australian dollar.
Uranium explorer Toro Energy(ASX:TOE) said the company could now advance its Wiluna uranium project in Western Australia, after major shareholder Oz Minerals(ASX:OZL) took up A$12 million in renounceable rights. Oz Minerals has a 46 per cent stake in Toro.
Important Corporate News
NAB(ASX:NAB) and Westpac(ASX:WBC) have cut home loan rates after the Reserve Bank cut the official interest rate by 0.75 percentage points to 5.25 per cent. Westpac cut its variable mortgage rate by 65 basis points to 7.71 per cent, effective from November 10. NAB has cut rates by 62 basis points to 7.74 per cent, effective November 10.
Telstra Corp Ltd(ASX:TLS) has maintained its earnings guidance for fiscal 2009. Earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to rise by between six and seven per cent. Earnings before interest and tax (EBIT) is forecast to grow by between six and eight per cent.
Mirvac(ASX:MGR) revised its earnings guidance to 13.4c yesterday from 23c-25c a share in July, and said it would "extricate'' itself from its businesses in Britain and the US. The company said earnings outlook for the rest of the 2009 fiscal year would be conservative and based on a scenario where the market would not improve.
Construction giant Leighton Holdings(ASX:LEI) has maintained its guidance for a 15% lift in annual net profit, after making a good start to the 2008/09 financial year. Leighton reported a first quarter net operating profit of $105 million, up 7% on the prior corresponding period. Total revenue grew 32% to A$4.1 billion in the three months ended September 30.
1. Related Stocks - Mid Market (AEST 1300)
------------------------------------------------------Code % Change Volume Turnover Low High------------------------------------------------------ASX:IPM -.47 96,562 $101,510 105 105.5ASX:TOE 1,250,025 $166,818 12.5 14ASX:COE -6.45 421,913 $124,239 29 30ASX:OZL -9.34 15,184,814 $15,154,030 96.5 101ASX:NAB -3.35 4,354,627 $108,721,681 2480 2519ASX:WBC -2.08 3,248,612 $72,848,446 2075 2118ASX:TLS 10,050,859 $41,973,255 413 420ASX:MGR +26.9 18,348,412 $19,629,257 94 132ASX:LEI -5.51 639,689 $17,432,204 2675 2785
2. Top 10 ASX on Turnover - Mid Market ((AEST 1300)
------------------------------------------------------Code % Change Volume Turnover Low High------------------------------------------------------ASX:BHP -7.24 7,719,824 $234,436,496 2907 2981ASX:ANZ -8.57 8,873,346 $153,568,875 1733 1770ASX:NAB -3.35 4,355,287 $108,738,201 2480 2519ASX:CBA -2.48 2,428,456 $97,442,316 3972 4044ASX:RIO -8.71 977,512 $78,651,503 7825 8000ASX:WBC -2.13 3,256,525 $73,015,262 2075 2118ASX:FGL +3.93 10,124,405 $60,253,423 585 613ASX:NWS -18.23 3,771,438 $49,754,519 1245 1363ASX:QGC 8,239,495 $47,382,508 575 576ASX:TLS 10,050,859 $41,973,255 413 420
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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