Aust Market Outlook - 02/03/10, 9.32am EST

Market Reports

The Australian share market is likely to open stronger this morning following positive leads from US and European markets overnight. Investor focus today will be on the RBA’s interest rate decision expected this afternoon.

Wall St closed higher on Monday with stocks lifting on news of AIG’s US$35 billion asset sale, a better than expected read on consumer spending and reports of a new bailout package for Greece.

American International Group announced that it has agreed to sell its Asian life insurance business to UK Prudential PLC for US$35.5 billion. This is the largest deal for the insurer since the company received bailout funds from the government during the height of the GFC.

In economic news out of the US, the Institute for Supply Management's manufacturing index fell to a read of 56.5 in February from 58.4 in January. Economists expected it to fall to 57.9.

A government report shows construction spending dropped 0.6% in January after falling 1.2% in December in line with forecasts.

And a separate report shows that personal spending rose 0.5% in January after rising 0.3% in December. Economists expected a rise of 0.4%.

Checking how US Markets finished stronger on Monday - the Dow Jones Industrial Average rose 79 points to 10,404 points. The S&P500 Index gained 11 points to 1,116 and the NASDAQ was up 35 points to 2,274.

To other international markets, European stocks were also higher. London’s FTSE rose 51 points, Paris was up 61 and Frankfurt gained 115.

Asian stocks closed stronger on Monday with Hong Kong’s Hang Seng up 448 points, Tokyo’s Nikkei rising 46 and China’s Shanghai Composite adding 36 points.

The Australian share market closed higher on Monday. The S&P/ASX 200 Index rose 49 points to 4,687 and on the futures market the SPI200’s up 24 points. On to currencies: the Aussie Dollar at 8:50AM was buying 90.12 US cents, 60.14 Pence Sterling, 80.33 Yen and 66.48 Euro cents.

In economic news, The RBA is to hold its monthly board meeting today with a decision on interest rates expected at 2:30pm Australian eastern daylight time. ABS retail trade data for January is to be released, as well as building approvals also for January and data on government spending for the December quarter.

To company news around this morning: Shares in aluminium producer Alcoa Inc (ASX:AAI) are currently trading at $45.25. The company has announced new load-based electricity contracts with Loy Yang Power to power its smelter at Point Henry, Geelong and the Portland aluminium smelter through to 2036. The contracts, worth over $5 billion, take effect in 2014 for the Point Henry smelter and in 2016 for the Portland facility. The two smelters are responsible for around 15% of Victoria’s total power consumption.Alcoa says the contracts are for around 820 mega watt of load and, with future expansion options, could represent more than half of Loy Yang Power’s generation output. Alcoa posted a $74 million loss for calendar 2008.

Shares in Perth based manganese and iron ore junior Jupiter Mines Ltd (ASX:JMS) rose 4.44% to $0.235 yesterday. The company has announced a transformational deal that involves Jupiter acquiring a 49.9% stake in the Tshipi manganese project in South Africa's Kalahari Basin. The company is to acquire the stake from former BHP Billiton CEO Brian Gilbertson’s privately held resources investment company Pallinghurst and its co-investors. Jupiter says the stake is valued at $245 million, with Gilbertson’s Pallinghurst and its co-investors to emerge from the deal with an 85% stake in Jupiter Mines. Mr Gilbertson says Pallinghurst recognises Jupiter’s significant potential and says this deal will fast track Jupiter’s transition from explorer to developer and producer. Jupiter Mines posted a loss for fiscal 2009.

Let’s take a look now at ex-dividend: and among those companies going ex-dividend today we have Amcor with a 12.5 cent unfranked dividend, Caltex with a 25 cent fully franked dividend, Hastie Group with a 5 cent fully franked dividend, Origin Energy with a 25 cent fully franked dividend, Tatts Group with a 10 cent fully franked dividend, and UGL with a 29 cent fully franked dividend.

To commodities: Gold declined $0.60 to US$1,118.30 an ounce for the April contract on Comex. For the May contract Silver slipped 6 cents to US$16.46 and copper rose 6 cents to US$3.34.

And finally, oil fell $0.78 to US$78.88 a barrel for April light crude in New York.


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