Aussie stocks are higher at midday, driven by gains in resource stocks thanks to increased metals prices, but investors remain cautious ahead of the RBA’s rate decision tomorrow.
The S&P/ASX200 index is 40 points higher at 4,678 and on the futures market the SPI200’s up 72 points.
In economic news: The TD-Melbourne Institute inflation gauge shows inflation rose by just 0.1% in February, after jumping 0.8% in January. The relatively slow result could influence the RBA’s decision on whether to increase interest rates tomorrow, though analysts are predicting they will rise.
And manufacturing activity expanded in February thanks to a lift in new orders which flowed through to stronger production and input deliveries. The Australian Industry Group/PricewaterhouseCoopers performance of manufacturing index rose by 2.8 points to 53.8. Readings above 50 indicate a rise in activity.
In company news: Australia’s largest energy retailer AGL Energy Ltd (ASX:AGK) has announced it will build a $716 million wind farm in south-west Victoria, following changes to the government’s renewable energy scheme. The Macarthur Wind Farm will be constructed under a joint venture between AGL and Meridian Energy Ltd, one of New Zealand’s largest energy companies. When constructed, the wind farm will generate 365MW of power. AGL says the final decision to commit to construction is subject to the government legislating the proposed changes to its renewable energy scheme. Shares in AGL Energy Ltd rose 1.04% to $14.52. Rio Tinto Ltd (ASX:RIO) has agreed to acquire 15 million shares in Ivanhoe Mines Ltd for $259.34 million, increasing its stake to 22.4%. CEO of the company’s copper division Andrew Harding says the investment underlines Rio’s confidence in the quality of the Oyu Tolgoi deposit and its priority in Rio’s project portfolio. Under the deal, Rio has the right to increase its stake in Ivanhoe Mines up to 44%. Production is expected to begin in 2013, with a five-year ramp up to full expected production of 450,000 tonnes of copper per year and 330,000 ounces of gold. Rio Tinto shares added 1.45% to $71.52.
Turning now to market indices: Most sectors are performing well at midday, but the frontrunner is the Staples index, up 144 points at 7,740. Shares in Goodman Fielder rose 1.99% to $1.535. Shares in Woolworths and Coca-Cola Amatil are also higher.
One of the only sectors in the red at midday is the Telco Services index, down 2 points to 1,024. Shares in Reverse Corp fell 3.7% to $0.26. While shares in Amcom Telecommunications and Telecom of New Zealand are also lower at noon.
Looking to New Zealand and the NZSX50 is 11 points higher.
Taking a look at the top 4 stocks by turnover: Telecom of New Zealand is top of the list, stock down 4.29% at $2.23 followed by Guiness Peat Group, Auckland International Airport and Fletcher Building.
To gold and the dollar: Gold is trading at US$1,118.95 an ounce and the Aussie dollar is trading at 90.02 US cents.
