Australian stocks look set to bounce into the first session of the new financial year after global markets spiked on the back of breakthrough action from European leaders to tackle the region’s debt crisis. On the local front there is no major economic data due for release today but the Reserve Bank of Australia will meet tomorrow for its monthly interest rate decision.
Economic news
The latest read on manufacturing in China has come in better than expected despite continuing to drop to its weakest read this year. The China Federation of Logistics and Purchasing reported yesterday that the China Manufacturing Purchasing Managers Index dropped to 50.2 in June from 50.4 the month before. A read above 50 indicates expansion in the manufacturing sector.
Figures
Wall Street surged on Friday, posting a strong end to the first half of the year: On its last trading day of the week, the Dow Jones Industrial Average gained 278 points to close at 12,880, the S&P500 rose 33 points to close at 1,362 and the Nasdaq rallied 86 points to close at 2,935.
European markets also jumped on Friday: London’s FTSE lifted 78, Paris climbed 145 and Frankfurt soared 266.
Asian markets also advanced at the end of last week: Hong Kong’s Hang Seng rose 416, Tokyo’s Nikkei gained 133 and China’s Shanghai Composite added 30 points.
The Australian share market rebounded from a sluggish start on Friday to close 1.2 per cent stronger. The S&P/ASX 200 index gained 50 points on Friday, finishing the week 46 points stronger at 4,095. On the futures market the SPI is 38 points higher.
Currencies
The Australian Dollar at 7:15AM was buying $US1.0026 cents, 65.4 Pence Sterling, 81.99 Yen and 80.98 Euro cents.
Economic news out today
TD Securities and the Melbourne Institute: Monthly inflation gauge
Company news
Doubts have emerged over the identity of a mysterious bidder who expressed interest to buy David Jones Limited (ASX:DJS) for $1.65 billion at the end of last week. Confirmation of the unsolicited approach from EB Private Equity shot the department store retailers stock up to a three month high and to one Friday’s best performers. However little is known about the bidder, leading to speculation the bid is not serious, and reports The Australian Securities and Investments Commission is investigating the suitor and the offer. Shares in David Jones jumped 14.6 per cent on Friday to finish the week at $2.59.
Leighton Holdings Limited (ASX:LEI) is understood to now be considering offers for its Thiess Waste Management business. The Australian reports Transpacific Industries Group Limited (ASX:TIP), Germany's Remondis and the UK’s recycling firm Sita are believed to have launched bids for the Thiess business. Analysts have suggested the Thiess Waste Management business could fetch as much as $300 million. Shares in Leighton Holdings rose 1.94 per cent on Friday to finish the week at $16.27.
Ex-dividends today
GrainCorp Limited (ASX:GNC)
Programmed Maintenance Services Limited (ASX:PRG)
Viterra (ASX:VTA)
Ex-dividends tomorrow
Clime Capital Limited (ASX:CAM)
Metcash Limited (ASX:MTS)
Commodities
Gold is up $50.70 to $US1,604 an ounce for the August contract on Comex.
Silver is up $1.32 to $27.61 for September.
Copper is up $0.16 at $3.50 a pound for September.
Oil is up $7.27 at $84.96 a barrel for August light crude in New York.
