The Australian share market rallied at the end of a difficult week for investors. Better than expected GDP figures out of the US spurred global metal and equity markets to strong gains.
It has become widely accepted that the Reserve Bank will lift interest rates for the second successive month next Tuesday. The big question is by how much, with the majority of analysts forecasting a 25 basis point hike with others pointing a rise of 50 basis points.
Meanwhile in economic news, the RBA said that credit to the private sector fell 0.2% in September 2009. For the year credit rose 1.7%.
The main drag on the figures was a continuing decline in business credit, down 1.3% in September, which offset a 0.7% increase in housing credit. Housing credit over the year rose a solid 7.7%.
At the end of the day, the All Ords rose 71.7 to 4,646.9, while the ASX/200 added 68.5 to 4,643.2. Over 3 billion shares worth around $7.9 billion had changed hands.
The Materials and Resources sector climbed 1.8%.
BHP Billiton added 32c to $37.45, while Rio Tinto spiked $2.80 to $63.78.
In London overnight BHP said that it would look to joint venture possibilities in the coming year, rather than takeover opportunities.
Base metals surged in London last night including a 6.2% gain in the price of lead.
Steelmaker Bluescope added 10c to $3.02, while iron ore producer Fortescue surged 14c, or 3.8% to $3.85.
Lihir Gold rose 7c to $3.05, while copper and gold miner OZ Minerals climbed 6.7% to $1.20.
Junior iron ore miner Gindalbie Metals spiked 5.5c to 88.5c as final approval for a new West Australian mine was given.
Energy stocks were 1.6% stronger. Woodside put on $1.01 to $47.70 and Santos rose 20c to $15.10.
Origin added 40c to $16.07 as it reaffirmed its full-year profit guidance of 15% growth.
Aquila’s shares remained halted throughout the day at $7.18 before it was announced that the FIRB had approved China’s Baosteel Group’s proposed $285 million investment in the coal and iron ore producer. The investment will result in Baosteel owning a 15% stake in Aquila.
The major banks all made ground. NAB rallied 80c to $29.85, while CBA gained 80c to $52.25.
The broader Banks and Financials sector climbed 1.9%.
Macquarie Group added 75c to $50.00. The investment bank reported a first half profit of $479 million, down 79% from the previous corresponding period. It is expecting a similar result for the second half.
All the insurers made ground with Suncorp-Metway and QBE the best performers having jumped 2.9% each.
Property Trusts surged. The sector slumped 4.4% yesterday but regained 3.7% on Friday.
Goodman Group surged 10.7% to 62c, while Mirvac, Dexus and Stockland were more than 6% higher.
Heavyweight Westfield gained 16c, or 1.3% to $12.27.
Consumer Staples were 0.1% above the line following a mixed day from the majors.
Woolworth’s dipped 2c to $28.63, while Wesfarmers put on 14c to $28.09.
Goodman Fielder shed 6c to $1.61.
The Consumer Discretionary sector was up 0.6%. The retailers were mixed, with Harvey Norman down 3c to $3.99 after going ex-div today.
David Jones fell 13c to $5.36 after rival Myer announced yesterday that its float price would be $4.10 – at the lower end of expectations.
Gamer Aristocrat rallied 3.9% to $4.52, while media company Fairfax rose 1.9% to $1.61.
Industrials were 2.5% higher. Macquarie Airports added 3.6%, while fellow Macquarie satellite, Macquarie Infrastructure put on 8c, or 5.9% to $1.445 after announcing it would split its portfolio of toll-roads between two new separately listed companies.
Qantas gained 8c to $2.80 and Leightons rose $1.05, or 3% to $36.00.
Telstra added 1c to $3.32 with the broader Telecommunications sector up by 0.1%.
Among Healthcare stocks, CSL slumped 40c to $31.50, while Sonic Healthcare shed 23c to $14.02.
The sector lost 1%.
Around the region, the Nikkei 225 rose 142.7 to 10,033.8. Across the Tasman, the NZSE50 added 20.0 to 3,215.6. The Straits Times Index added 38.4 to 2,670.7, while the Hang Seng climbed 636.2 to 21,901.1.
Spot gold was trading at US$1048.07 per ounce, and the Aussie was buying US$0.9163.
Origin reaffirms guidance
Origin Energy reaffirmed its profit guidance for FY10. The company said based on performance for the first quarter and current economic conditions prevailing, it expects the underlying profit for year to be around 15% higher than the prior year.
At the end of the day, Origin shares were up 40c to $16.07.
Macquarie 1H profit down 21% to $479m
Macquarie Group posted a $479m net profit for the six months to 30 September, up 79% from the prior six months. The investment bank foreshadowed that it was expecting a similar result for the second half of the year.
By the finish, Macquarie shares were trading up 75 to $50.00.
Sims profit down 77% on a year ago
Sims Metal Management reported a 77% drop in profit in the September quarter versus the previous corresponding period. The metal recycler said profit for the quarter totalled $33.3 million, which was on the back of a 49% fall in revenue to $1.8 billion in the same period.
At the close, Sims shares were trading down 38c $19.82.
AWE lowers production guidance
Australian Worldwide Exploration lowered its production guidance for FY10 from 7m barrels of oil equivalent to 6.5m BOE due to recent adverse weather at Tui and the planned extended shutdown at BassGas. The company also reported revenue of $109 million for the September quarter, up 25% on the previous quarter.
At the close, AWE shares were up 2c to $2.61
Gindalbie given green light for mine
Gindalbie Metals said that the Commonwealth Government had given environmental approval for the Karara Iron Ore project in Western Australia. This represents the final regulatory approval required by the miner and as a result construction would begin next week, the company said.
By the end of the day, Gindalbie Metals shares were up 5.5c to 88.5c.
IAG reaffirms FY guidance
Insurance Australia Group expects to deliver an insurance margin towards the upper end of its 9–11% guidance for FY10 if the operating conditions experienced in the first quarter continue. Managing director and CEO, Michael Wilkins, said he was pleased with the group’s progress to date.
At the final whistle, IAG shares were trading up 8c to $3.78.
Sky City on track
Sky City Entertainment Group said it was on target to deliver double-digit NPAT growth in the current financial year based on first quarter results. However, the gamer said it would be challenging in the current economic environments, both in Australia and New Zealand.
At the end of the day, Sky City shares were up 7c to $2.76.
Macquarie Infrastructure aims to split
The board of Macquarie Infrastructure Group said that it would split into two separate entities and divide the current assets amongst the two new companies. The board of the toll-road operator said that, following the split, there would be $226 million in surplus cash, which would entitle shareholders to a special distribution of 10c per security.
By the finish, MIG shares were trading up 8c to $1.445.