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A strong lead from Wall Street and rise in commodity prices led a rally on the Australian market Monday morning. A better than anticipated jobs report in the US saw global markets advance, while locally a takeover offer for Arrow resulted in the company’s shares soaring.  

Investors will be eagerly awaiting the release of important employment and consumer confidence data due later in the week.

At noon, the All Ords was up 46.6 to 4,820.0, while the ASX/200 rose 42.2 to 4,809.4. Over 933 million shares worth around $1.9 billion had changed hands.

BHP Billiton gained $1.01, or 2.4% to $43.51 to add 12.3 points to the index. The mining behemoth said it has reached terms for a significant portion of its hard coking coal volumes for 2010, based on a structural change to shorter term market based pricing. The company said it has reached agreement with a range of customers throughout Europe, China, India and Japan.

Rio Tinto advanced $1.70, or 2.3% to $76.71 as UBS upgraded its target price on the stock.

The Materials and Resources sector was 2.1% higher.

Gold miners Newcrest and Lihir rose 1.4% and 1.7% to $34.46 and $2.96 respectively. The price of the precious metal edged 0.2% higher Friday.

Atlas Iron shares were halted pending an announcement regarding a “potential material transaction”.

Aluminium producer Alumina rallied 3.7% to $1.70.

Meanwhile, strong gains were widespread among Energy stocks resulting in a 3.9% climb from the sector.

Arrow Energy shares surged 45.4% to a record high $5.06 after the company announced it has been approached by joint bidders Royal Dutch Shell and PetroChina with a non-binding indicative and conditional proposal. Under the proposal shareholders would receive $4.45 cash per share plus a share in a new entity comprised of Arrow’s international business.

Majors Woodside and Origin gained 2.3% and 2.4% to $45.56 and $16.88.

Oil Search rallied 5.2% to $5.51 as the price of crude moved to over US$82 a barrel at one point on Friday, or close to 17-month highs.

Santos put on 42c, or 3.1% to $13.85, while coal miner New Hope climbed 9.9% to $4.90.

Weakness within the big four banks and among the insurers saw the Banks and Financials sector only edge 0.1% above the line.

NAB dipped 5c to $26.45 as speculation surfaced it is considering selling or buying UK based banking businesses.

ANZ was flat, while Westpac and CBA were 0.4% either side of the line. The former was trading 10c higher at $26.85 and the latter was down 22c to $54.88.

Investment bank Macquarie rose $1.31, or 2.7% to $49.37.

IAG was the worst of the insurers as the sub-sector struggled in the aftermath of severe storms that hit Melbourne and the state of Victoria over the weekend. Reports have surfaced that thousands of claims have been made as a result. There has also been flooding in Queensland.

IAG lost 8c, or 2% to $3.98. AMKP showed strength, up 2.2% to $6.10.

It was a subdued mornings trade for the Property Trust stocks. The sector gained 0.2%, with heavyweight Westfield up 5c to $12.29.

The Industrials sector was one of only two in the red. It weakened 0.1%, primarily due to a 14c, or 1.9% drop to $7.13 from Brambles.

Leighton added 18c to $39.48.

Coal transporter QR Limited is expected to list shares as early as October this year as part of would be the biggest initial public offering since Myer last November. 

A gain from Wesfarmers outweighed a loss for Woolworths as the Consumer Staples sector rose 0.2%.

Wesfarmers advanced 24c, or 0.7% to $32.95, while Woolworths shed 13c, or 0.5% to $27.92.

Consumer Discretionary put on 0.5% following strength from the media players.

Ten jumped 10.5c, or 6.1% to $1.825, while Newscorp and Seven gained 1.6% and 2.4%.

Gamer Aristocrat rallied 2.8% to $4.35.

JB Hi-Fi slid 28c to $19.89 as outgoing CEO Richard Uechtritz sold 500,000 shares for about $9.87 million.

Myer and David Jones put on 0.9% and 1.2% to $3.42 and $5.05 on speculation they will report improved trading at their first-half results meeting.

Harvey Norman fell 1.7% to $3.94.

Telstra rose 2c to $2.93 as the Telecommunications sector added 0.6%.

Around the region, the Nikkei 225 gained 149.7 to 10,518.7, while the NZSE50 rose 5.9 to 3,220.6. The Straits Times Index advanced 30.9 to 2,821.2.

Spot gold was trading at US$1,134.20 per ounce, while the Aussie was buying US$0.9089.

Charter Hall Retail acquires two properties
Charter Hall Retail announced the acquisition of a shopping centre located in Canberra and a bulky goods retail centre in Adelaide for a total of $69.8 million. The trust said the assets were acquired at an average yield of 9.5% before acquisition costs and would be funded through existing cash reserves and debt capacity following the success of capital management initiatives over the past 18 months.

At noon, Charter Hall Retail shares were unchanged at 59c.

Mosaic Oil posts a loss on write downs
Mosaic Oil has posted a first half post-tax loss of $4.36 million on the back of exploration write-downs of $4.7 million. Looking ahead, the Australian oil and gas producer said that during the rest of the financial year, the company plans to focus on development drilling in the Surat-Bowen Basin to increase revenue and profits in the 2H FY10 and beyond.

Half way through the day, Mosaic Oil shares were unchanged at 9.1c.

Arrow receives takeover offer
Arrow Energy confirmed it has received a non-binding indicative and conditional proposal from a company jointly owned by Royal Dutch Shell and PetroChina. The company said that under the proposal shareholders would receive consideration of $4.45 cash per share plus a share in a new entity comprised of Arrow’s international business.

By lunchtime, Arrow shares were trading up $1.62 at $5.10.

Prime Infrastructure appoints CEO
Prime Infrastructure Group announced the appointment of former senior managing partner of major shareholder Brookfield Asset Management Brian Kingston as managing director and CEO. The company said the appointment followed the resignation of Jeff Kendrew who is set to join Brookfield as chief development officer of its global infrastructure platform.

By noon, Prime Infrastructure shares were trading up 2c to $3.52.

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