Outlook: Aust market may open stronger

Market Reports

Returning from the Easter long weekend, the Australian share market is likely to open stronger this morning after some positive economic news out of the US helped to lift Wall St overnight.

US stocks rallied on Monday with the Dow reaching closer to the 11,000 mark as investors encouraged by last week’s jobs report, a strong housing report and the launch of Apple’s iPad.

A Government report showed that employers added 162,000 jobs to their payrolls in March, the most than in any other month in the last three years.

The National Association of Realtors pending home sales index jumped 8.2% to a read of 97.6 in February, surprising economists who expected a decline of 1%.

And in another report the Institute for Supply Management’s services sector index rose to a read of 55.4 in March from 50 in February. A read above 50 indicates expansion in the sector.

To the figures now and the Dow Jones Industrial Average gained 46 points to 10,974 on Monday. The S&P500 Index rose 9 points to 1,187 and the NASDAQ added 27 points to 2,430.

European stock markets finished stronger on Thursday, London’s FTSE advanced 65 points, Paris rose 60 points and Frankfurt gained 82 points.

Asian stocks were higher, Hong Kong’s Hang Seng closed 298 points higher on Thursday, Tokyo’s Nikkei closed 53 points higher on Monday and China’s Shanghai Composite gained 11 points on Friday.

The Australian share market closed higher last Thursday. The S&P/ASX 200 Index rose 32 points to 4,908. On to currencies: the Aussie Dollar at 8:40AM was buying 92.12 US cents, 60.24 Pence Sterling, 86.92 Yen and 68.31 Euro cents.

To what’s ahead in local economics news: The RBA is to hold its monthly board meeting today with a decision on interest rates expected at 2:30pm Sydney time. The Dun and Bradstreet business expectations survey for the June quarter is due out, as well as the ANZ job advertisements series for March, and the Australian Chamber of Commerce and Industry survey of investor confidence for February.

To company news around this morning: Shares in global miner Rio Tinto Ltd (ASX:RIO) rose 1.53% to $79.60 last Thursday. The Australian Financial Review reports that the miner has followed BHP and Vale’s lead and asked its customers for quarterly iron ore pricing contracts rather than the traditional annual contracts. Vale last week said it had secured 90% of its sales volumes on quarterly contracts, and BHP announced that a significant number of customers throughout Asia have agreed to move to shorter-term contracts. Rio earned profit of $5.4 billion in 2009.

Shares in construction and engineering company Forge Group Ltd (ASX:FGE) gained 0.68% to $2.95 last Thursday. The company, who is currently that takeover target of engineering group Clough Ltd (ASX:CLO), says it has received a competing takeover proposal from a third party. Forge says its board has determined that the proposal is superior to that offered by Clough. In response Clough says it will consider the competing proposal and provide an update to the market when further details are known. Clough has call option agreements with some of Forge’s major shareholders to acquire a 19.9% stake in Forge regardless of competing takeover proposals. Forge posted a profit in the year to June 30, 2009.

To companies going ex-dividend - And there is just one company going ex-dividend today and that is Aberdeen Leaders with a 2 cent fully franked dividend. Coming up tomorrow we have Austbrokers Holdings and on Thursday Matrix Composites & Engineering and Noni B are going ex-dividend.

To commodities: Gold rose $7.80 to US$1,132.90 an ounce for the May contract on Comex. Silver is up almost 23 cents to US$18.10 and copper is up 5 cents at US$3.63.

And the price of oil rose $1.75 to US$86.62 a barrel for May light crude in New York.