Aussie shares are marginally higher at midday with gains in the big miners like BHP and Rio Tinto helping to support the market on hopes that the Federal Government will modify its Resources Super Profits Tax. However persisting concerns over Europe’s debt crisis capped gains.
The S&P/ASX200 index is 9 points higher at 4,317 and on the futures market, the SPI200’s up 20.
In economic news: The Organisation of Economic Cooperation and Development, or OECD, predicts that the Reserve Bank of Australia will increase interest rates from the current level of 4.5% to 5.1% by the end of this year, and up to 5.7% by June next year.
In company news: Transfield Services Ltd (ASX:TSE) subsidiary USM, has secured new contracts totalling US$188 million with major US clients Rite Aid Corporation, Bed Bath and Beyond, JoAnn Fabric and Craft Stores, The Sports Authority and Regis Corporation. CEO Peter Goode says the company continues to see positive signs of recovery in the US, with USM holding preferred bidder status over an additional US$90 million of work. Transfield Sevices holds preferred bidder status in the Australian and New Zealand region over $590 million of contracts and has been awarded $1.4 million of new work in the Middle East. Shares in Transfield Services gained 1.94% to $3.67.
Specialist life insurer Tower Australia Group Ltd (ASX:TAL) has reported a rise in profit to $28.4 million for the half year and announced a $96 million capital raising. New entitlements under the capital raising will be offered at a price of $1.85, with the funds to be used for growth opportunities. The company says it is well placed and says the market for life insurance continues to grow above 10% a year. Tower says it expects underlying profit for the full year to be within analyst’s forecasts of between $77 million and $92 million. Shares in Tower Australia Group fell 12.61% to $2.08.
Turning now to market indices: The best performing sector at midday is the Materials index, up 143 points at 11,341. Shares in Avoca Resources are 5.29% higher at $2.19. Shares in Equinox Minerals and Atlas Iron are also higher at midday.
The worst performing sector is the Industrials index, down 25 points to 3,355. Shares in Ausenco lost 17.88% to $2.48, while shares in Spotless Group and Brambles are also lower.
Looking to New Zealand and the NZSX50 is up 2 points. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand heads the list with stock up 1.58% at $1.93 followed by; Sky Network Television, Mainfreight, and Fletcher Building.
To gold and the dollar: Gold is trading at US$1,213.25 an ounce and the Aussie dollar is trading at 82.58 US cents.
