Shares extend rally into second day
Australian shares moved higher Wednesday morning, however not quite matching the 1% rise in the Dow overnight. Financial and mining majors led the broader indices higher, while healthcare stocks were also in favour.
Wall Street rallied on the back of a better-than-expected report on US home sales.
At noon, the All Ords rose 31.4 to 4,919.3, while the ASX/200 gained 33.6 to 4,908.4. Around 1 billion shares worth around $2.0 billion had changed hands.
For the second consecutive day the big four banks were particularly strong. NAB, CBA and Westpac were between 1% and 1.1% higher, while ANZ had added 0.6%.
Investment bank Macquarie rallied 86c, or 1.7% to $50.69 as the Banks and Financials sector put on 0.9%.
The insurers were all within 1% above the gain line. QBE rose 19c to $21.37.
Market and mining heavyweights BHP Billiton and Rio Tinto put on 1.1% and 2% to $43.53 and $77.21 respectively. The latter said yesterday that regulatory approval of its proposed iron ore joint venture with the former would likely take another several months.
Base metals prices were mixed overnight, with nickel the best performer up 1%, while the price of lead dropped 2.9%.
The Materials and Resources sector advanced 1%.
Australia’s third largest iron ore producer, Fortescue rallied 9c, or 1.9% to $4.88. The company’s CEO, Andrew Forrest, said he was prepared to sell controlling stakes in the company's magnetite projects to foreign steel mills.
Gold miners Newcrest and Lihir were relatively flat despite a 0.4% rise in the price of the precious metal overnight.
Chemicals and explosives company Orica slid 14c to $26.26 as the company announced the clean up bill at its Botany site would cost the company about $63 million.
Energy stocks were mainly higher as the price of crude edged towards the US$82 a barrel mark. The sector gained 0.7%.
Woodside added 36c to $47.56, while Santos and Oil Search put on 1.3% and 1.4% to $14.44 and $5.98.
Coal and iron ore explorer Aquila and uranium miner Paladin climbed 3.2% and 3.6%.
On the other side of the line, Coal & Allied and Origin slipped $1.22 and 8c to $88.94 and $16.73.
Industrials dropped 0.8% to be the worst performing sector.
Transurban slumped 29c, or 5.6% to $4.86 after the Australian government’s Future Fund said that it has withdrawn from discussions with the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan to join the Canadians in their bid to acquire the Australian toll road operator.
Transfield lost 1.2% to $4.04 despite being awarded a US$27.7 million five-year contract with the North Carolina Department of Transportation today.
Leighton and Brambles weakened 0.1% and 0.8%, while Toll was 1.1% higher at lunch.
Consumer Staples was led 0.1% higher by small gains from both Wesfarmers and Woolworths. They were trading at $31.99 and $28.72 respectively.
Solid gains from several sector majors saw Consumer Discretionary move 1% higher.
Media company Fairfax climbed 3.1% to $1.845, gamer Crown added 1.4% to $8.42 and surfwear retailer Billabong put on 2.8% to $11.01.
The Healthcare sector outperformed to gain 1.3% a day after President Obama signed into law a health care bill that would extend health care coverage to around 95% of Americans.
CSL rose 49c, or 1.45 to $35.74 and Sonic rallied 2.1% to $14.14. Ansell jumped 3.6% to $12.48.
A broker downgrade from Credit Suisse did not send AGL Energy shareholders packing as the stock added 8c to $15.22.
The Utilities sector edged 0.1% into the black.
Telstra lost 3c to $3.09 as the Telecommunications sector weakened 0.6%.
Around the region, the Nikkei 225 gained 100.6 to 10,874.8, while the NZSE50 edged 0.4 higher to 3,228.8. The Straits Times Index rose 12.1 to 2,917.7.
Spot gold was trading at US$1,102.45 per ounce, while the Aussie was buying US$0.9181.
Orica hit with $63m clean up bill
Orica said this morning that the clean up of mercury at the company’s Botany side would cost the company around $45 million. In addition to this the company said that, following a review of existing environmental provisions in light of cost changes, approval delays and other factors, it would increase environmental provisions relating to hexachlorobenzene waste disposal at the Botany site by $18 million.
Half way through the day, Orica shares were trading down 13c to $26.27.
Mirvac reaffirms positive message
Mirvac said the group was seeing a number of positive signs in the marketplace, and despite expressing caution, also said it was confident of its direction. Writing in the company’s half-year report this morning, managing director, Nick Collishaw, said that capital management initiatives in the last 18 months meant the group was in a strong position to capitalise on opportunities when they arise.
At lunch, Mirvac shares were trading up 2c to $1.50.
Sedgman awarded $48m contract
Sedgman said it has secured a $48 million construction contact for the upgrade of Xstrata Coal’s ATCOM coal handling and preparation plant at Witbank near Johannesburg. The resource sector services company said the new contract follows on from the $75 million design and supply contract announced on 19 November 2009, taking the total value of work awarded to the company on the upgrade project to $123 million.
Half way through the day, Sedgman shares were up 3c to $1.56.
Future Fund turns back on Transurban deal
Transurban Group shares fell more than 5% in early trade after the Australian government Future Fund said that it has withdrawn from discussions with the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan to join the Canadians in their bid to acquire the Australian toll road operator.
At midday, Transurban shares were trading down 29c to $4.86.
Sumitomo has 5.52% of Nufarm shares under offer
Nufarm said the tender offer by Sumitomo Chemical Company Limited to acquire up to 20% of the total issued shares in Nufarm received acceptance offers of 5.52% of all Nufarm shares. The company said due to the terms of the offer Sumitomo would not acquire more than 20% of the issued shares in Nufarm.
By noon, Nufarm shares were down 1c to $8.79.
Transfield wins US$28m contract
Transfield Services said it has secured a US$27.7 million five-year contract with the North Carolina Department of Transportation. The company said Transfield Services North America Transportation Infrastructure would deliver operations, maintenance, emergency response, asset management and construction services on 135 miles of interstate roadway and associated assets.
At lunchtime, Transfield shares were down 3c to $4.06.
NZ current account swings to deficit
New Zealand reported today seasonally adjusted current account balance deficit of $3.1 billion for the December quarter, a swing from a $39 million surplus in the prior quarter – the first such surplus posted in more than 20 years. The swing from a surplus to a deficit was driven by an increase in income earned by foreign investors from their New Zealand investments, Statistics New Zealand said.
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