The Australian share market opened more than one per cent down today but, after the release of inflation figures, climbed up steadily to close 0.4 per cent higher. The lower than expected CPI figures fuelled gains among the retailers and banks, with most sector closing in positive territory amid hopes for an interest rate cut and a positive outcome to the EU summit.
The S&P/ASX200 Index today finished 15 points higher at 4,243. On the futures market, the SPI is 5 points higher.
Economic news
The latest inflation data has stoked speculation of a rate cut next week. The Australian Bureau of Statistics’ consumer price index has shown headline inflation rose 0.6 per cent in the September quarter, bringing the annual rate to 3.5 per cent. The Reserve Bank of Australia maintains a target range of between 2 to 3 per cent.
Company news
Fortescue Metals Group Limited (ASX:FMG) has extended its bond offer from $US1 billion to $US1.5 billion of senior unsecured notes. The Pilbara focused iron ore miner will put the funds to expanding existing infrastructure as it moves to boosting production to 155 million tonnes per annum in 2013. Separately today Fortescue’s CEO, Nev Power, said iron ore prices could begin to rebound within weeks if Chinese steel mills stop destocking of inventories. The price of iron ore has dropped by almost one third since early September due to softening demand from China, in what is usually a strong consumption season. Shares in Fortescue Metals Group closed 1.54 per cent higher at $4.62.
Super Retail Group Limited (ASX:SUL) says it has started the new financial year well, and remains confident of increasing stores, delivering like-for-like sales growth and improving gross margins. Last week Super Retail acquired Rebel Group Limited for $610 million and today flagged plans to boost the Rebel Group’s stores from 128 to 185 stores over the long term. Shares in Super Retail Group closed 0.93 per cent higher at $5.44.
Steelmaker ArcelorMittal has pulled out of its $4.9 billion joint bid of Macarthur Coal Limited (ASX:MCC) with Peabody Energy Corporation. Peabody will now take full control of the takeover which yesterday achieved majority control.
Waste management company Transpacific Industries Group Limited (ASX:TPI) has announced a new $1.525 billion refinancing package, extending its average debt maturity from 1.9 years to 4.1 years.
Insurance Australia Group Limited (ASX:IAG) has confirmed full year insurance margin guidance of between 10 to 12 per cent, following encouraging growth in the first quarter.
Commonwealth Bank of Australia (ASX:CBA) has launched a new iPhone payment app which could effectively signal the end of credit card payments. The free "tap and pay" app, called ‘Kaching’, will allows customers to transfer payments through email, text message and Facebook.
Best and worst performers
The best performing sector was Health Care, rising 78 points to close at 7,774. The worst performing sector was Utilities, easing 34 points to close at 4,330. The best performing stock in the S&P/ASX200 was Intrepid Mines shares jumped 9.95 per cent to close at $1.16. Shares in Beadell Resources and Billabong International also advanced. The worst performing stock was Gindalbie Metals, losing 5 per cent to close at $0.57. Shares in Panoramic Resources and OM Holdings also eased today.
Commodities
The price of gold is $US1,712 an ounce. Light crude is up $0.23 cents at $US93.40 a barrel.
