As US stocks soared on optimism surrounding a potential deal to raise the debt ceiling, the Australian share market opened sharply higher and is 1.6 per cent up at noon. Despite the market soaring on that solid lead, the buoyancy could be short lived due to President Obama’s rejection of a Republican proposal to extend the nation’s borrowing authority given it wouldn’t also reopen the government. Locally, all the major sectors are stronger at this stage, with healthcare leading the way, as clinical development giant Mesoblast jumps on news of a significant acquisition.
The S&P/ASX 200 index is 80 points up at 5,227. On the futures market the SPI is 88 points higher.
Company news
Mesoblast Limited
(ASX:MSB) shares are stronger in early trade after it announced the acquisition of the entire mesenchymal stem cell business of New York listed Osiris Therapeutics. The acquisition comes with an initial outlay of $US20 million, although the final price could reach as high as $US85 million depending on progress of developing the acquired products. CEO Professor Silviu Itescu says the many commercial and strategic benefits of this transaction firm Mesoblast’s leadership position in the global regenerative medicine industry. Shares in Mesoblast are currently the best performers on the ASX, trading up 7.48 per cent at $5.89.
Diversified services company UGL Limited
(ASX:UGL) says its engineering chief Russell Waugh has stepped down due to his alleged connection to the bribery scandal engulfing his former employer, Leighton Holdings Limited
(ASX:LEI). CEO Richard Leupen says the decision is not reflective of any view held by UGL on the allegations made against Mr Waugh during his time with Leighton, but rather the best outcome for him to privately defend allegations being made against him. Shares in UGL are trading up 2.96 per cent at $7.83.
Best and worst performers The best performing sector is Healthcare gaining 217 points to 13,847. Shares in Mesoblast limited
(ASX:MSB) have risen 7.48 per cent and trading at $5.89. Shares in Sigma Pharmaceutical Limited
(ASX:SIP) and Ramsay Health Care Limited
(ASX:RHC) are also stronger.
The sector with the fewest gains is Real estate investment trusts, adding 13 points to 1,033. Shares in Westfield Group
(ASX:WDC) are up 0.68 per cent, trading at $11.05. Shares in Shopping Centers Australasia Property Group Limited
(ASX:SCP) and BWP Trust
(ASX:BWP) are also ahead at midday.
Gold and the dollar
Gold is trading at $US1,288.50 an ounce and the Australian dollar is buying $US0.9455.
