The Australian share market is expected to rocket in early trade, after US stocks soared to their biggest one-day gain since January amid signs the political deadlock in Washington may be closer to a resolution.
House Republicans will offer the White House a six-week extension of the nation's borrowing limit in exchange for wide-ranging negotiations on spending. The measure has been seen as a potential breakthrough to the impasse that has shut down part of the government and threatens the ability for the US to borrow, but won't reopen the government in the short term.
Traders say the strong rebound in stocks was led by investors exiting from positions built to protect portfolios from declines in the stock market. Others say hedge funds have been forced to buy stocks to chase the rising market.
Currencies
The Australian dollar pushed higher on that news of negotiations that could end the US political stalemate. At 8:20AM the Aussie was buying $US94.53 cents, 59.22 Pence Sterling, 92.82 Yen and 69.92 Euro cents.
Figures
There was green on the screen at Wall Street: The Dow Jones Industrial Average jumped 323 points to close at 15,126, the S&P 500 added 36 points to close at 1,693 and the NASDAQ gained 83 points to close at 3,761.
European markets followed suit as the Bank of England kept its benchmark interest rate and bond-buying program intact. London’s FTSE lifted 93 points, Paris gained 91 points and Frankfurt surged by 169 points.
Asian markets were mixed. Japan's Nikkei Stock Average rose 1.1 per cent, boosted by weakness in the yen, while China's Shanghai Composite dropped almost one per cent ahead of key economic data due out over the weekend. Tokyo’s Nikkei added 157 points, Hong Kong’s Hang Seng fell 83 points, and China’s Shanghai Composite lost 21 points.
The Australian share market finished slightly down, however well off the day’s lows after an unexpected drop in the jobless rate. The S&P/ASX 200 index closed 6 points down to finish at 5,147. On the futures market the SPI is 71 points up.
Company news
National Australia Bank Limited
(ASX:NAB) chief Cameron Clyne has welcomed a long-promised inquiry into the financial services sector, saying the timing was logical. While embracing the review, Mr Clyne didn’t say what he believed should be its terms of reference. Shares in NAB fell 0.26 per cent to close at $34.17.
Rio Tinto’s Limited
(ASX:RIO) iron ore division head Andrew Harding has sought to reassure investors that he will not lead the miner through its large-scale Pilbara expansion plans unless there is a sound business case for doing so. If it follows through on the expansion, Rio would become the world's largest iron ore producer. But Rio and other large miners have come under pressure to reconsider expansion plans while the outlook for Chinese commodity demand remains uncertain. Shares in Rio lifted 0.02 per cent higher to close at $60.21.
Ex-dividend
Trafalgar Corporate Group Limited
(ASX:TGP) and
Commodities
Gold is down $10.30 to $US1,297 an ounce for the December contract on Comex. Silver is up $0.01 to $21.90 for December. Copper is up $0.02 at $3.25 a pound. Oil is up $1.40 at US$103.01 a barrel for November light crude in New York.
