The Australian share market is poised to pounce higher after Wall Street’s major indexes jumped more than 1 per cent on Friday. US stocks shrugged aside a weaker than expected monthly jobs report to end a choppy week of trade on positive territory.
While there is no major local economic news scheduled for release today the week ahead holds domestic home loan, business and consumer confidence and labour data. In America attention will be on Janet Yellen’s inaugural testimony to US lawmakers for hints as to the new US Federal Reserve chief's stance on the nation’s monetary policy.
US economic news
The American economy added less jobs than expected at the beginning of 2014 as the jobless rate fell to a new five-year low. The Labor Department reports non-farm payrolls gained 113,000 in January, against expectations of adding about 180,000 jobs. America’s unemployment rate fell to 6.6 per cent in January, from 6.7 per cent in the prior month.
Figures
Wall Street ended a volatile week of trade higher despite disappointing jobs data: On Friday, The Dow Jones Industrial Average rose 166 points to close at 15,794, the S&P 500 rose 24 points to close at 1,797 and the Nasdaq rose 69 points to close at 4,126.
European markets lifted at the end of last week amid optimism about the region’s economic recovery: On Friday, London’s FTSE added 13 points, Paris added 40 points and Frankfurt added 45 points.
Asian markets advanced at the end of last week with China charging higher as it returned from a week-long Lunar New Year holiday: Tokyo’s Nikkei increased 307 points, Hong Kong’s Hang Seng increased 214 points, and China’s Shanghai Composite increased 11 points.
The Australian share market extended January’s decline and lost 0.4 per cent in the first week of February though gained ground as the week wore on: The S&P/ASX 200 Index gained 35 points on Friday to trim the weekly loss of 23.5 points and finish at 5,166.5 points. On the futures market the SPI is 37 points higher.
Currencies
The Australian Dollar notched up its strongest weekly performance since October 2013 following the Reserve Bank of Australia’s latest forecasts. This morning at 7.30am the Aussie dollar was buying $US0.8954 cents, 54.62 Pence Sterling, 91.78 Yen and 65.79 Euro cents.
Company news
The spotlight will be on the energy sector this morning after Aurora Oil & Gas Limited
(ASX:AUT) scored a $1.84 billion takeover bid on Friday. Reports have now suggested the oil and gas producer could be headed for a takeover tussle if rival bidders emerge ahead of the proposal going to a shareholder vote in late April or early May. Canadian miner Baytex Energy offered Aurora $4.10 per share on Friday in a move geared to expanding its US shale portfolio. Shares in Aurora Oil & Gas soared 56.11 per cent on Friday to end the week at $4.09.
Fellow energy stocks such as AWE Limited
(ASX:AWE) and Buru Energy Limited
(ASX:BRU) also got a boost after Aurora’s offer was revealed at the end of last week. Sundance Energy Australia Limited
(ASX:SEA), Antares Energy Limited
(ASX:AZZ) and Lonestar Resources Limited
(ASX:LNR) gained more than 11 per cent on the back of the bid, lifting the energy sector to the top of the pack on Friday. Westoz Investment Company Limited
(ASX:WIC) was another beneficiary of Aurora’s bid as the listed investor holds an 8 per cent stake in the takeover target. Shares in Westoz Investment Company lifted 6.09 per cent on Friday to end the week at $1.22.
Ex-dividends
Echo Entertainment Group Limited
(ASX:EGP) paying a $0.04 fully franked dividend
JB Hi-Fi Limited
(ASX:JBH) paying a $0.55 fully franked dividend
K2 Asset Management Holdings Limited (KAM) paying a $0.06 fully franked dividend
Commodities
Gold has risen $4.30 and is buying $US1,262.90 an ounce for the April contract on Comex.
Silver has lifted $0.01 to $19.94 for March.
Copper has added $0.01 to $3.24 a pound.
Oil has gained $2.04 to $US99.88 a barrel for March light crude in New York.
