Sydney, Jan 5, 2009 AEST (ABN Newswire) - Last Friday Wall Street closed 3% higher on hope of a fiscal stimulus plan by US Obama government. As investors have grown more optimistic that the worst might be over, the US market remained strong in recent weeks and has lifted almost 20% since November 20 last year.
Last Friday the Australian share market had a poor start at the first trading day of the New Year, as S&P/ASX 200 Index closed down 8.5 points, or 0.23 per cent, at 3713.8 points, while the All Ordinaries Index closed just 3.6 points down at 3655.7 points. Analysts warn that it is too early to get excited despite a positive lead from the US. The market might remain volatile in the coming three months as there will be some bad news ahead in the reporting season.
Today at 0703 AEDT on the Sydney Futures Exchange, the March Share Price Index futures contract was 107 points higher at 3,785.
The Australian dollar has opened higher, as firmer equity markets and stronger commodity prices boosted high-yielding currencies such as the Aussie. At 0700 AEDT, the Australian dollar was trading at 71.41/51 US cents, up 2.6% from Friday's close of 69.55/61.
Crude oil rose, capping the biggest weekly gain since 1986, as the conflict in Gaza increased concern that Middle East supplies would be cut and Russia curbed natural-gas shipments to Ukraine. Oil prices jumped 14 per cent on New Year's Eve. Light, sweet crude for February delivery rose $US5.57 to settle at $US44.60 a barrel.
Key Economic Facts and Figures
Wayne Swan yesterday urged employers not to lay off staff when economic conditions are widely tipped to worsen as the government officials are working on options for jobs packages. The Rudd Government has revealed that it will spend A$41million to get jobs for indigenous people, those with mental health conditions and those who reside in jobless families.
M&A News
National Australia Bank's(ASX:NAB) Clydesdale and Yorkshire banks in the UK could be put up for sale after the banking group launched a wide-ranging review of the business. The banks are thought to be at risk because investors are unhappy with what they see as lower returns from the British operations.
The cash-up explorer Cape Lambert Iron Ore(ASX:CFE) is considering some acquisition opportunities, including the assets of collapsed miner CopperCo and debt-laden OZ Minerals(ASX:OZL). Cape Lambert has been on the hunt for fresh acquisitions since pocketing A$400 million in August from the sale of its namesake iron ore project to China Metallurgical Group.
Important Corporate News
OZ Minerals(ASX:OZL) said lenders were "very positive" to its needs, as the company is seeking to refinance debt and bridging loans to meet cash shortfalls at three of its projects.
Gunns(ASX:GNS) faces tougher conditions on federal approval for its controversial Tasmanian pulp mill, with federal Environment Minister Peter Garrett concerned about the adequacy of existing requirements. A Gunns spokesman yesterday insisted conditions on the project were already the most stringent applied to any industrial development in Australia's history, and that its mill would be "the most environmentally friendly in the world".
Senior living group Babcock & Brown Communities Group (ASX:BBC) has changed its name to Lend Lease Primelife Ltd following approval at its annual general meeting last week. Sydney-based Lend lease(ASX:LLC) will inject A$195 million cash into BBC through the issue of 283.3 million securities at 60 cents each and 100 million convertible notes at 25 each.
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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