The Australian share market is likely to open higher this morning, led by strong gains on Wall Street and in global markets.
US stocks rallied overnight, lifting on climbing commodities prices and the Federal Reserve’s pledge to keep interest rates low.
In European markets, shares soared on a European Union contingency plan to save Greece from default and Standard & Poor’s decision to affirm Greece’s debt rating.
In economic news out of the US, the Federal Reserve has maintained its near zero interest rate and promises it will stay that way for an extended period of time.
The rate has stayed at zero to 0.25% since December 2008 in a bid to help the US economy recover from the global financial crisis.
The central bank says economic conditions continue to improve and the job market is stabilising.
To the figures now and the Dow Jones Industrial Average closed higher, gaining 44 points to 10,686. The S&P500 Index was up 9 points and the NASDAQ rose 16 points to 2,378.
European stocks posted solid gains overnight. London’s FTSE rose 27 points, Paris gained 48 points and Frankfurt was up 67 points.
Asian stocks were mixed with Hong Kong’s Hang Seng falling 56 points, Tokyo’s Nikkei lost 30 points and China’s Shanghai Composite gained 16 points.
The Australian share market closed higher yesterday. The S&P/ASX 200 Index finished 13 points higher to 4,797 and on the futures market the SPI200 is up 35 points. On to currencies: the Aussie Dollar at 8:45AM was buying 92.08 US cents, 60.38 Pence Sterling, 83.14 Yen and 66.89 Euro cents.
In local economic news: The ABS will release data on dwelling unit starts for the December quarter, and Westpac and the Melbourne Institute release their Indices of Economic Activity for March.
To company news around this morning: Shares in Macmahon Holdings Ltd (ASX:MAH) are 0.67% lower at $0.74. The engineering contractor has been awarded a three-year contract worth over $190 million to develop and operate Queensland’s new Cameby Downs coal mine. Mine owner Syntech Resources Pty Ltd awarded the contract to Macmahon to undertake all mining for the first stage of the project. This will include planning, mine development, waste stripping, coal mining and train loading. Production at the mine, which is in the Surat Basin about 360km west of Brisbane, will start in July and the first coal train load is due in October. At full production in stage one, the mine will produce 1.4 million tonnes per year of coal for export via the Port of Brisbane. Macmahon Holdings posted a profit of $17.16 million for fiscal 2009.
Shares in National Australia Bank Ltd (ASX:NAB) are down 0.3% to $26.75. The bank has revealed its $18.4 billion portfolio of troubled credit instruments caused losses of $1.3 billion over the past two years. NAB warns the portfolio is likely to take years to wind down, but says the health of the assets have stabilised amid signs of an economic recovery. The bank has set up a new business unit called specialised group assets to hold the CDOs. Restated accounts showing earnings across NAB’s various businesses over the past two years show a loss of $577 million last year, mostly on write-downs and bad debts. At the height of the global financial crisis in 2008, specialised group assets returned a loss of $748 million. For the 12 months to September 30, 2009, NAB booked a profit of $2.589 billion.
Now to the companies going ex-dividend today: We have EVZ with a quarter cent fully franked dividend, Melbourne IT with a fully franked 8 cent dividend and Retail Food Group with a 5.25 cent fully franked dividend. Among those going tomorrow are Challenger Financial Services, Corporate Express and OrotonGroup.
To commodities: Gold is up $17.10 at US$1,122.20 an ounce for the April contract on Comex. For the May contract silver gained 25 cents to US$17.33 and copper is up 5 cents at US$3.36.
And finally the price of oil rose $1.90 to US$81.70 a barrel for April light crude in New York.
