Aust Market Outlook - 17/02/10, 9.44am EST

Market Reports

The Australian share market is likely to open stronger this morning after US and European markets rose overnight, higher commodity prices are also likely to lift resource stocks today.

Wall St rallied overnight following better than expected earnings results from Merck and Barclays and a weaker US dollar which boosted commodity prices.

A bigger than expected increase in manufacturing activity in the New York area also added to the rally.

The Empire State index rose to a read of 24.91 in February up from 15.92 in January. Economists expected the index to rise to 18.

The Dow Jones Industrial Average gained 170 points to 10,269 points. The S&P500 Index rose 19 points to 1,095 and the NASDAQ is up 31 to 2,214.

To other international markets, European stocks were also stronger. London’s FTSE added 77 points, Paris rose 60, and Frankfurt is 81 points higher.

To Asian stocks and on Tuesday Hong Kong’s Hang Seng and China’s Shanghai Composite were closed, Tokyo’s Nikkei rose 21.

Back to the local market and Aussie stocks closed higher on Tuesday. The S&P/ASX 200 Index climbed 22 points to 4,568 and on the futures market the SPI200’s up 61 points.

Moving on to currencies: the Aussie Dollar at 9:10AM was buying 90.22 US cents, 57.14 Pence Sterling, 81.35 Yen and 65.52 Euro cents.

In local economic news out today: The Department of Education, Employment and Workplace Relations skilled job vacancies survey and the Westpac/ Melbourne Institute indices of economic activity for December.

Among those companies reporting earnings today: Brambles, Coca-Cola Amatil, Ansell, Transurban Group and CSR are to report first half results, and Axa Asia Pacific is to report its annual results.

Turning now to company news: Shares in infrastructure, construction and mining services group AJ Lucas Group Ltd (ASX:AJL) rose 0.89% to $3.40. The company says that the Riverstone/Carlyle Global Energy and Power Funds has committed to subscribe US$58 million in Cuadrilla Resources Holding, established by AJ Lucas to hold its investment for unconventional hydrocarbons exploration and development in Europe. Following the investment both Lucas and Riverstone will have a fully diluted shareholding of 36% of Cuadrilla’s issued ordinary equity. AJ Lucas says Cuadrilla is now well capitalised with sufficient resources and the ability to fund its drilling and exploration program for the next three years. AJ Lucas Group reported net profit after tax of $103.25 million in the 2009 financial year.

Shares in Eastern Star Gas Ltd (ASX:ESG) added 2.6% to $0.79. The company’s CEO David Casey has suggested that the company’s NSW coal-seam gas acreage has the potential to host a liquefied natural gas project. Mr Casey says the company’s growing resource and reserves confirms not only the potential of the Narrabri CSG Project to be the leading supplier of natural gas in NSW, but also the potential of the project to support major new initiatives in NSW or elsewhere. Eastern Star Gas reported a loss for the year to June 30, 2009.

Taking a look at ex-dividends: Going today is Boral with a 7 cent fully franked dividend, coming up tomorrow is SAI Global and on Friday Healthscope.

To commodities: Gold rose $30 to US$1,120 an ounce for the April contract on Comex. For the March contract, silver advanced 64 cents to US$16.09 and copper rose 14 cents to US$3.24.

And finally the price of oil increased $3.11 to US$77.24 a barrel for March light crude in New York.


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