Local shares bounce back strongly
Australian shares opened higher Monday, recovering a large amount of the ground lost Friday as a result of Dubai debt concerns. Banks and commodity stocks were once again the leaders as every sector managed to trade above the line.
At midday, the All Ords added 99.5 to 4,696.7, while the ASX/200 gained 109.5 to 4,681.6. About 980 million shares worth around $1.7 billion had changed hands.
The banks rallied after all being heavily sold in the wake of the Dubai debt crisis. NAB jumped $1.43, or 5.3% to $28.44, while CBA gained $1.80, or 3.6% to $52.40 as the company revealed it has exposure to Dubai World. However, CBA said it does not expect to incur a material loss as a result.
The Banks and Financials sector was 3.4% higher by noon.
Macquarie Group climbed $2.28, or 5% to $47.62, while IAG and AMP were the best of the insurers, both up 3.2% to $3.89 and $6.11 respectively.
All of the larger capped Property Trusts were higher, sending the sector up 2.3% overall. Westfield and Stockland added 26c and 13c to $12.14 and $4.04 respectively.
Goodman Group rose 1.5c to 60c after the company said it was in line to achieve its previous FY10 profit forecast of $310 million.
Materials and Resources gained 2% after a mixed session for metals prices on Friday. The influential copper price was one of which to rise.
BHP Billiton added close to 12 points to the index to be trading at $41.36, while Rio Tinto gained 3.1% to $70.65.
Rio shares jumped 3.2% in London Friday.
Fortescue put on 4.2% to $4.18 as Citigroup upgraded its rating and target price on Australia’s third largest iron ore producer.
OZ Minerals added 4.5c, or 3.8% to $1.225 after announcing plans to form of joint venture with IMX Resources to explore and develop copper-gold projects in South Australia. IMX shares climbed 10.6% to 36.5c.
Gold stocks lagged. The price of the precious metal fell as a result of a strengthening greenback and falling equities. Newcrest dipped 41c to $36.52.
Australia is now the world’s second largest gold producer following falling production in the US and South Africa.
Energy stocks advanced despite the price of crude weakening 2.5% in New York on Friday. The sector rallied 2.5% overall.
Woodside gained $1.01 to $49.11, while Santos rose 3.3% to $14.81.
Aquila surged another 13.1% to a 14-month high of $11.05. This morning the iron ore and coal explorer announced it would be issuing bonus shares to shareholders for free.
Leighton was the major mover among the Industrials as concerns of its exposure to Dubia subsided. The company’s shares were 2.8% higher at $35.76.
Transfield added 10c to $3.95 as UBS upgraded its rating on the stock to “neutral”.
The sector added 1.6%.
A 3.1% gain to $29.70 from Wesfarmers sent the Consumer Staples sector 1.5% higher.
Woolworths put on 11c to $28.00.
Metcash rose 7c to $4.63. On Friday the company announced its plans to enter the hardware industry by bidding for Mitre 10. Metcash featured heavily in broker reports this morning.
A relatively mixed morning in comparison to other sectors resulted in the Consumer Discretionary sector advancing a modest 1%.
The major improvers included Billabong, Aristocrat and Flight Centre which were between 3.1% and 3.3% in the black.
On the other side of the ledger Newscorp lost 1.1% to $15.00. The media company’s shares weakened 3.9% on Wall Street Friday.
Telstra edged 1c higher to $3.40 as it unveiled plans to growing the business and improving customer service. The Telecommunications sector added 0.2%.
Around the region, the Nikkei 225 rose 197.9 to 9,279.5, while the Straits Times Index shed 10.8 to 2,751.5. Meanwhile, the NZSE50 put on 36.0 to 3,130.4.
Spot gold was trading at US$1,171.93 per ounce, and the Aussie was buying US$0.9144.
Goodman Group aims for $310m profit in FY10
Goodman Group at its Annual General Meeting this morning said that the group was in line to achieve its previous forecast profit of $310 million for the 2010 financial year. The company said that it was expecting its last writedowns to come in the December half, estimated at around 5% of total assets.
At lunch, GMG shares were up 1.5c to 60c.
Aquila to issue bonus shares
Aquila Resources announced a plan to issue bonus shares to its shareholders. The company said it was doing so as a means to recognise the significant progress that the company has made in its coal, iron ore and manganese projects over the last 12 months and the Strategic Co-operation with Baosteel Group Corporation.
Half way through the day, Aquila shares were up $1.21c to $10.98.
Telstra seeks improved customer service
Telstra CEO David Thodey, six months into the job following the resignation of Sol Trujillo, today announced a raft of changes aimed at growing the telco in key markets and improving customer service. Mr Thodey said it was a part of fresh strategy for Telstra, some of which had been announced in recent weeks.
At midday, Telstra shares had risen 1c to $3.40.
OZ Minerals and IMX to form JV
OZ Minerals and IMX Resources have signed an agreement with the intention of forming a joint venture that would see them explore for and develop copper-gold projects on IMX’s Mt Woods tenements in South Australia. As part of the deal the two companies said OZ Minerals would purchase 26.15 million IMX shares at 38.5c each, taking a 13% stake in the junior miner.
At noon, OZ Minerals shares were trading up 4.5c to $1.225, while IMX shares were trading up 3.5c to 36.5c.
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