Spurred on by a late rally on Wall St overnight, the local share market is trading higher at midday with the big miners like Rio Tinto and BHP leading the gains on upbeat comments from Rio that it expects demand for iron ore to remain strong.
The S&P/ASX200 index is 50 points higher at 4,315 and on the futures market, the SPI200’s up 46.
In economic news: According to data released by the ABS, construction work rose 1.9% in the first quarter.
In company news: Despite growing concern for the global economy mining giant Rio Tinto Ltd (ASX:RIO) says it expects demand for iron ore to continue to strengthen. CEO Tom Albanese told shareholders at the company’s annual general meeting that the outlook for global iron ore remains very positive and growth fundamentals remain the same as before the financial crisis, dominated by the rise of China. Mr Albanese was also upbeat about aluminium saying the outlook for the commodity is improving with demand in China virtually back to pre-recession levels. Shares in Rio Tinto rose 3.03% to $63.57.
Takeover target Macarthur Coal Ltd (ASX:MCC) is among a consortium of 13 miners that have made a $4.85 billion offer for QR Central Queensland coal track network, owned by the state government. The consortium called The Queensland Coal Industry Rail Corp includes Macarthur Coal, BHP Billiton, Rio Tinto Coal, Felix Resources Peabody Energy and Xstrata. The consortium believes their offer is superior to the QLD Government’s $3 billion IPO of all Queensland Rail’s coal and freight assets. Importantly, the group says its offer is able to be settled with the government prior to the IPO and will not be dependent on volatile equity markets, removing major risk for the state while also providing early settlement. Shares in Macarthur Coal gained 0.58% to $10.45.
Turning now to market indices: Among a sea of red, one of the only sectors in the black is the Materials index, up 280 points at 11,169. Shares in Andean Resources are 8.71% higher at $3.37. Shares in Mincor Resources and Fortescue Metals Group are also higher at midday.
The worst performing sector is the Utilities index, down 15 points to 4,032. Shares in Challenger Infrastructure Fund lost 2.24% to $1.31, while shares in AGL Energy and Energy Developments are also lower.
Looking to New Zealand and the NZSX50 is up 19 points. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand is at the top of the list with stock up 3.78% at $1.92 followed by; Fletcher Building, Downer EDI, and ANZ.
To gold and the dollar: Gold is trading at US$1,203 an ounce and the Aussie dollar is trading at 82.12 US cents.
