The Australian share market bounced back from last week’s seven week low to end 1.85 per cent higher, closing above 4000 points. Headlines from Europe lifted the local bourse 2 per cent by noon, but later saw the market dip on speculation the International Monetary Fund (IMF) has denied it will provide a €600 billion loan to Italy. Most sectors advanced, led by strength in the financials and miners.
The S&P/ASX 200 Index rallied 74 points, snapping a six day losing streak to end at 4,058. On the futures market the SPI is 75 points higher.
Economic news
Ratings agency Moody’s Investors Service has warned that Europe’s financial crisis is putting all of the European Union’s currencies and credit ratings at risk. Moody’s says, "While Moody's central scenario remains that the euro area will be preserved without further widespread defaults, even this 'positive' scenario carries very negative rating implications in the interim period”.
Company news
Qantas Airways Limited (ASX:QAN) has tipped a first half profit drop of up to 66 per cent, dragged down by industrial action and rising fuel costs. The airline expects an underlying profit of up to $190 million in the first six months of fiscal 2012, down from $417 million the year before. Qantas has also today denied it’s planning to abandon its Asian expansion and confirmed it’s in talks with potential partners in Singapore and Malaysia. Shares in Qantas Airways lifted 3.44 per cent today, closing at $1.505.
Rio Tinto Limited (ASX:RIO) has increased its iron ore output targets despite warning of the impact of global uncertainty and weakening sentiment. Separately today, Rio has received the green light from more than 99 per cent of Coal & Allied Industries Limited (ASX:CNA) shareholders to acquire the company. Rio owns 75.7 per cent of Coal and Allied and has offered its target $117 per share and an $8 fully-franked special dividend. Shares in Rio Tinto rose 2.13 per cent, closing at $63.27.
BHP Billiton Limited (ASX:BHP) has announced senior management changes. Chief financial officer Alex Vanselow will retire, with Graham Kerr to step into the role, and Mike Henry has been appointed as chief marketing officer.
BHP also today awarded Norfolk Group Limited (ASX:NFK) $82 million worth of work. The engineering company will design and install rail signalling systems for BHP Iron Ore's Port Hedland inner harbour project in Western Australia.
Shares in Woodside Petroleum Limited (ASX:WPL) continued to fall today, following disappointing production guidance last week. Merrill Lynch has now cut the stock to underperform and UBS has downgraded the stock to neutral.
Shares in Sundance Resources Limited (ASX:SDL) slumped to the worst performer of the day as its largest shareholder and suitor’s $1.65 billion takeover bid hit a hurdle. Hanlong Mining has been unable to obtain a key condition of the bid, a letter of confidence from China Development Bank.
Best and worst performers
Most sectors advanced: The best performing sector was Financials Excluding Real Estate Investment Trusts, rising 135 points to close at 4,388. The worst performing sector was Real Estate Investment Trusts, losing 5 points to close at 779 points.
The best performing stock in the S&P/ASX 200 was OceanaGold Corporation, rising 8.93 per cent to close at $2.44. Shares in Lynas Corporation and Aquila Resources also finished stronger.
The worst performing stock was Sundance Resources, dropping 5.88 per cent to close at $0.40. Shares in White Energy Company and Navitas also lost value.
IPOs
RXP Services Limited (ASX:RXP) started trading today. The consulting and professional services provider listed at 50 cents, opened at 59.5 cents and closed 7.56 per cent lower at 55 cents.
Commodities
The price of gold is $US1,706 an ounce.
Light crude is up $1.62 at $US98.39 a barrel.
