Market Wrap: ASX bounces on US jobs data

Market Reports

The Australian share market jumped more than 1 per cent this morning and remained near session highs on the back of a stronger than expected US jobs report. The US employment rate dropped to a three year low and the economy added 243,000 jobs in January. At home retail sales dropped in December but job ads gained in January. Most sectors closed higher; the miners finished on top with property trusts, telcos and financials also showing strength, ahead of tomorrow’s interest rate decision from the Reserve Bank of Australia.

The S&P/ASX200 Index bounced 45 points to finish at 4,296. On the futures market the SPI is 36 points higher.

Economic news

Retail sales fell unexpectedly in the lead up to Christmas. According to the Australian Bureau of Statistics retail sales fell 0.1 per cent in December 2011, defying expectations for a rise of up to 0.2 per cent.

Australian job advertisements grew to a two year high at the beginning of 2012. The ANZ job advertisements series showed ads in major metropolitan newspapers increased 6 per cent in January from the month before and 0.7 per cent higher over the year.  

A read of inflation at the beginning of this year has come in within the Reserve Bank’s target of between 2 to 3 per cent. TD Securities and the Melbourne Institute’s inflation gauge increased 0.2 per cent in January bringing the annual pace to 2.2 per cent.

Company news

Gindalbie Metals Limited (ASX:GBG) jumped to one of today’s best performers on news the iron ore miner had awarded Downer EDI Limited (ASX:DOW) one of the largest single operational contracts for its $2.6 billion Karara Project in Western Australia’s mid-west. Under the six-year $570 million contract engineering company Downer will provide services for Karara ahead of the start of commissioning later this year. Shares in Downer also closed at a six month high of $3.79 today, also boosted on news the New South Wales government will provide financial aid to Downer’s Waratah train project. Shares in Gindalbie Metals jumped 7 per cent today, closing at $0.685.

Argo Investments Limited (ASX:ARG) says its half year profit fell from the year before due to $11.4 million in one-off transactions. The investment company generated a half-year profit of almost $86 million amid what it describes as uncertain economic conditions and weaker equity markets. A fully franked interim dividend of 13 cents per share has been declared. Shares in Argo Investments gained 1.89 per cent today, finishing at $5.40.  

Cleaning, catering and maintenance services provider Spotless Group Limited (ASX:SPT) has agreed to offer its suitor, private equity fund Pacific Equity Partners, non-exclusive due diligence. Spotless has affirmed it will only back a bid worth at least $2.80 per share.   

Forestry company Gunns Limited (ASX:GNS) entered into a trading halt today, it said pending an announcement regarding a capital raising and equity investment. The announcement is expected before the market opens on Wednesday.

Perpetual Limited (ASX:PPT) has announced the resignation of its chief, Chris Ryan, after Mr Ryan and the board clashed over the fund manager’s strategy. Geoff Lloyd has been appointed to step into the role from today.

Shares in Alchemia Limited (ASX:ACL) rose more than 6 per cent after the biotechnology company reported a better than expected sales performance from one of its products. 

Best and worst performers

Most sectors advanced: The best performing sector was Materials lifting 204 points to close at 11,833. The worst performing sector was Health Care, easing 34 points to close at 7,756 points.

The best performing stock in the S&PASX 200 was Bathurst Resources, rising 9.15 per cent to close at $0.775. Shares in Downer EDI and Gindalbie Metals also gained.

The worst performing stock was Ten Network Holdings easing 2.22 per cent to close at $0.88. Shares in Perseus Mining and Acrux also closed lower.

Commodities

Gold is trading at $US1,734 an ounce.

Light crude is $0.54 lower at $US97.30 a barrel.