The Australian share market looks poised to rise after Wall Street rallied on better than expected earnings, the International Monetary Fund lifted its global growth forecast, Germany’s economic sentiment index rose more than expected and Spanish bond yields eased.
Economic news
The International Monetary Fund has lifted its outlook for global growth this year, from 3.3 per cent to 3.5 per cent, and forecast it will increase to 4.1 per cent next year. The IMF says the increase, “reflects the IMF's view that the euro has stabilised since last year”.
US economic news
Fewer homes were being built in America last month. The Commerce Department has reported new homes built dropped 5.8 per cent in March compared to the month before, but were still up 10.3 per cent from the year before.
Figures
Wall Street posted its best gains is more than a month on Tuesday: The Dow Jones Industrial Average added 194 points to close at 13,116, the S&P500 added 21 points to close at 1,391 and the Nasdaq added 54 points to close at 3,043.
European markets also lifted on Tuesday: London’s FTSE added 101 points, Paris added 87 points and Frankfurt added 176 points.
Asian markets closed lower yesterday: Hong Kong’s Hang Seng lost 48 points, Tokyo’s Nikkei lost 6 and China’s Shanghai Composite lost 22 points.
The Australian share market reversed earlier gains to end 0.3 per cent down on Tuesday: The S&P/ASX 200 index lost 14 points to finish at 4,289. On the futures market the SPI is now 51 points higher.
Currencies
The Australian Dollar at 7:15AM was buying $US1.0393 cents, 65.31 Pence Sterling, 84.11 Yen and 79.22 Euro cents.
Economic news due out today
Westpac Banking Corporation (ASX:WBC) and the Melbourne Institute: Leading indexes of economic activity
Company news
Shares in Rio Tinto Limited (ASX:RIO) fell 0.75 per cent on Tuesday, closing at $64.70. Global miner Rio Tinto will inject $300 million in Wickham town to support its iron ore production in the Pilbara region of Western Australia, after the state government gave its green light for the expansion. Wickham sits near Cape Lambert port and the renewal is expected to include new accommodation units and improvements in community facilities. The investment’s approval came on the same day Rio revealed its first quarter production and while iron ore output rose it came in lower than expected. In the 2011 financial year Rio Tinto reported a full year net profit of $6.7 billion.
Shares in Insurance Australia Group Limited (ASX:IAG) lifted 0.88 per cent on Tuesday, closing at $3.43. Australia’s largest insurer IAG is continuing its Asian expansion by entering the Vietnamese insurance market. Only last week IAG announced it’s entering into the Chinese insurance market and expanding into Malaysia’s insurance market. IAG has now inked a deal to buy a 30 per cent stake in a Vietnam based insurance company for less than $20 million. IAG reported a net profit of $167 million in the first half of its 2012 financial year.
Ex-dividends today
Ludowici Limited (ASX:LDW)
Ex-dividends tomorrow
Hyperion Flagship Investments Limited (ASX:HIP)
Whitehaven Coal Limited (ASX:WHC)
Commodities
Gold is up $1.40 to $US1,651 an ounce for the June contract on Comex.
Silver is down $0.301 to $31.67 for May.
Copper is up $0.02 at $3.65 a pound.
Oil is up $1.27 at $104.20 a barrel for May light crude in New York.
