The Australian share market looks to extend yesterday’s gains after global markets rallied on hopes that European leaders are nearing a resolution to tackle the region’s debt crisis. US investors were also buoyed by strong corporate results and two merger announcements.
Economic news
Data from HSBC Holdings and Markit, released yesterday afternoon, has shown China’s manufacturing sector expanded moderately in October. HSBC's China Flash Purchasing Managers' Index rose to 51.1 points, climbing above 50 points for the first time since July.
Figures
Wall Street started the week stronger: The Dow Jones Industrial Average advanced 105 points to 11,914, the S&P500 added 16 points to close at 1,254 and the Nasdaq gained 62 points to close at 2,699.
European stocks closed higher: London’s FTSE was up 59 points, Paris was up 49 and Frankfurt was up 84 points.
To Asian markets, stocks also rose: Hong Kong’s Hang Seng was up 746 points, Tokyo Nikkei was up 165 and China’s Shanghai Composite was up 53.
The Australian share market started the week 2.7 per cent stronger: The S&P/ASX 200 Index jumped 113 points to close at 4,255. On the futures market the SPI is 32 points higher.
Currencies
The Australian Dollar at 8:20AM was buying $US1.0474, 65.51 Pence Sterling, 79.71 Yen and 75.22 Euro cents.
Company news
Shares in New Hope Corporation Limited (ASX:NHC) gained 1.69 per cent yesterday, closing at $6.03. Reports have emerged that India's JSW Steel is putting together a $5 billion bid for Queensland-focused coal producer New Hope. Unidentified sources have told Bloomberg that JSW Steel is investigating New Hope and considering ways to raise money to fund the bid. At the beginning of this month New Hope told the Australian Securities Exchange that it had received a number of preliminary takeover proposals and invited others to submit offers. In the 2011 financial year New Hope Corporation booked a net profit of $503 million.
Yesterday’s worst performing stock in the S&P/ASX 200 index, and one of the few stocks to end in negative territory was The Reject Shop Limited (ASX:TRS), shedding 1.09 per cent to finish at $9.97. The discount retailer has reportedly denied that it is losing market share to Wesfarmers Limited (ASX:WES)-owned Kmart. According to The Australian Financial Review rumours are intensifying that Kmart’s recent change from high-low pricing to everyday low prices is moving in on The Reject Shop’s territory. The report also says The Reject Shop was last week one of the 20 most shorted stocks with 5.1 per cent of the stock sold short. In the 2011 financial year The Reject Shop’s net profit fell 30 per cent to $16 million.
Ex-dividends
Two companies are going ex-dividend today: Ama Group with a $0.01 fully franked dividend and CPT Global with a $0.01 fully franked dividend. Coming up tomorrow are Joyce Corporation and Sterihealth.
Commodities
Gold is up $16.20 to $US1,652 an ounce for the December contract on Comex.
Silver is up $0.45 to $31.64.
Copper is up $0.23 at $3.45 a pound.
Oil is up $3.87 at $91.27 a barrel for November light crude in New York.
