The local share market has followed Wall St’s positive lead and is trading higher at midday. The major banks like NAB and the Commonwealth Bank are leading the gains as investors temporarily put aside concerns for the Federal Government proposed mining tax and Europe’s debt crisis and focus on positive economic news out of the US.
The S&P/ASX200 index is 85 points higher at 4,466 and on the futures market, the SPI200’s up 80.
In economic news: The Australian Industry Group/Commonwealth Bank Performance of Services index fell 4.8 points to a read of 47.5 in May following a 4.3 point gain in April, and taking the index below the 50 mark indicating contraction in the sector.
IPA Recruitment’s Job Vacancies report showed a 13.7% fall in job vacancies in Australia in May. The result follows a 4% drop in April.
And the ABS says Australia’s balance of goods and services for April showed a surplus of $134 million.
In company news: An independent expert has deemed a takeover of Arrow Energy Ltd (ASX:AOE) by Royal Dutch Shell and PetroChina, fair and reasonable and in the best interests of shareholders. The independent expert also valued Arrow at between $4 and $4.40 a share, below the $4.70 cash offer by Shell and PetroChina. Arrow released the findings of independent expert Deloitte to the market today. Shares in Arrow Energy rose 0.82% to $4.89.
And Virgin Blue Holdings Ltd (ASX:VBA) new CEO John Borghetti is reportedly planning to overhaul the airline’s operations and could axe some international and domestic routes. A Fairfax report says Mr Borghetti wants to turn the airline into a business-focused carrier instead of a budget airline competing with the like of Jetstar and Tiger Airways. V Australia is likely to come under the microscope when the company completes a review of all of its routes at the end of this month. Fairfax says it is likely that Virgin will cut its Fiji and Phuket services and add more flights to the US through its alliance with Delta Airlines. Shares in Virgin Blue Holdings gained 5.26% to $0.30.
Turning now to market indices: All sectors are in positive territory at midday, however the sector with the biggest gain is the Financials, excluding Real Estate Investment Trust, index, up 131 points to 5,119. Shares in Lend Lease Group are 4.44% higher at $7.99. Shares in Bendigo & Adelaide Bank and National Australia Bank are also higher.
The sector with the smallest gain is the Consumer Staples index, up 51 points to 7,442. Shares in Goodman Fielder lost 0.74% to $1.35, while shares in GrainCorp and Coca-Cola Amatil are also lower.
Looking to New Zealand and the NZSX50 is 24 points higher. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand tops the list with stock flat at $1.86 followed by; Downer EDI, Fletcher Building, and Mainfreight.
To gold and the dollar: Gold is trading at US$1,222.30 an ounce and the Aussie dollar is trading at 84.64 US cents.
