The Australian share market looks set to extend yesterday’s positive run as markets around the world rally in response to the EU’s $1 trillion emergency package. Higher oil and metals prices are also likely to help lift resource stocks today.
Following a harrowing four days of losses on Wall St. US stocks soared on Monday as investors breathed a sigh of relief that the debt situation in Greece is now likely to be contained.
According to CNN Money, news of the bailout funds drove the S&P500 to its highest opening jump on record. Under the three year rescue plan valued at close to $1 trillion, European leaders will provide around $570 billion in government-backed loans, the European Commission will expand a stabilisation fund already in place by a further $76 billion, and the International Monetary Fund has agreed to provide in excess of $284 billion in bailout funds.
Turning to the figures now, and the Dow Jones Industrial Average finished 405 points stronger at 10,785. The S&P500 Index rose 49 points to 1,160 and the NASDAQ is 109 points higher at 2,375.
Relief flowed through to European stock markets with London’s FTSE up 264, Paris advancing 328 points and Frankfurt climbing 303 points.
Asian markets also rallied on Monday with Hong Kong’s Hang Seng rising 506 points, Tokyo’s Nikkei up 166 and China’s Shanghai Composite gaining 10 points.
To the local market, and Aussie stocks closed firmly in the black on Monday. The S&P/ASX 200 Index closed 119 points higher at 4,600 and on the futures market the SPI200 is up 58 points. On to currencies: the Aussie Dollar at 9:00AM was buying 90.24 US cents, 60.74 Pence Sterling, 84.11 Yen and 70.63 Euro cents.
In economic news, All eyes will be on Treasurer Wayne Swan when he hands down the 2010-2011 federal budget tonight, reports say that the government is to announce that its budget is set to return to surplus in fiscal 2013, three years earlier than forecast a year ago. Also out today is the Dun and Bradstreet initial business expectations survey for the September quarter.
To company news around this morning: Shares in grocery retail giant Woolworths Ltd (ASX:WOW) rose 1.08% to $27.23 yesterday. Woolies is to open an online store for its discount department chain Big W. According to the Australian Financial Review, the online store will offer around 4,000 items compared to the 60,000 offered at actual Big W outlets. The paper says the company believes that the online store will attract older Australians, and families due to its convenience. However not all are in favour of moving into the online arena, with the Fin Review reporting that Harvey Norman chairman Gerry Harvey believes there is no money to be made in online retailing in Australia. Woolworths earned over $1.8 billion in fiscal 09.
Shares in Bannerman Resources Ltd (ASX:BMN) jumped almost 41% yesterday before coming down to close 22.73% higher at $0.405. The uranium explorer announced some very encouraging drilling results from its Etango uranium project in Namibia. The company says exploration to the west, east and south of the Etango deposit suggests the presence of additional uranium mineralisation in close proximity to the proposed pit area at Etango. These areas have not previously been drilled and the company says it is very pleased with this early success. According to Reuters, Bannerman plans to have a mine at Etango by 2013 that it hopes will eventually produce 5 to 7 million pounds of uranium a year. The project contains a measured and indicated resource of 107.7 million pounds of uranium. Bannerman Resources posted a loss for the 12 months to June 30, 2009.
There is just one company going ex-dividend today and that’s Whitefield, paying an 8.5 cent fully franked dividend. Coming up tomorrow we have E & A with a fully franked 1.5 cent dividend.
To commodities, and the price of gold fell $9.60 to US$1,200.40 an ounce for the May contract on Comex. Silver is up 10 cents at US$18.53 and copper is 8 cents higher at US$3.22.
And finally oil gained $1.69 to US$76.80 a barrel for June light crude in New York.
