Australian shares moved above the 4500 mark for the first time in over 14 months, helped by mining and energy stocks.
4.50pm: That's all from us here at Markets Live, we've enjoyed your company. We'll see you all tomorrow from 9.30am.
4.47pm: The dollar rallied from a three-month low reached yesterday after finance ministers in Europe declared the region’s permanent aid fund operational and gains in commodity prices boosted demand for the currency.
The dollar added 0.4 per cent to $US1.0231 after touching $US1.0149 yesterday, the lowest since July 13. The dollar fell 1.8 per cent in the week through October 5, the biggest drop since the period ended May 4. It climbed 0.5 per cent to 80.19 yen today.
4.40pm: Here's a snapshot of the best and worst performers on the ASX200 today:
4.29pm: Energy stocks led the gains, jumping 1.3 per cent, Gold miners added 0.9 per cent and materials rose 0.8 per cent. Telecommunications and consumer staples bucked the trend, falling 0.3 and 0.1 per cent respectively.
4.13pm: The market has finished higher. The benchmark S&P/ASX200 added 23.4 points, or 0.5 per cent, to 4505.3, while the broader All Ords jumped 24.6 points, or 0.5 per cent, to 4526.6.
3.58pm: The ASX has now said 20 stocks have been halted.
3.45pm: With just 15 minutes left before the close of trade, here's what CMC Markets sales trader Ben Taylor had to say about the day's action:
- The Australian market has pushed higher today on the back of gains made in China, investors buying back into Aussie dollar assets and Iron Ore’s rally overnight.
- Our market is now topping out technically and will need to see enhanced prospects of economic growth and decreased macro risks to push our markets higher in the near term.
- Thursday’s employment figures will be closely observed as a key indicator for November’s interest rate decision. As the Australian dollar edges stubbornly higher towards its pre-cut position the chance of another RBA November cut increases.
- The rally in iron ore prices has put wind in the sails of mining and energy plays today. At over $110/tonne we have seen significant price recovery and should alleviate the margin concerns seen in September.
- The market is awaiting tonight’s meeting of Euro finance ministers for signs of positive economic stimulus as well as decisions around Greece’s next trance of bail out monies and talk about whether or not Spain needs a bailout. The headlines will drive the market over the next 24 hours and help determine if the recent risk-on sentiment continues.
3.38pm: We're getting a few interesting comments on this one ... blogger Tony Featherstone asks: Is the tall poppy syndrome for Australian entrepreneurs more fiction than fact?
3.34pm: The ASX said 18 stocks have currently stopped trading.
3.22pm: A representative from the ASX Group said:
"There’s a technical issue that we’re investigating and will have normal functionality returned as soon as possible. As a precaution, any stocks with market sensitive announcements to release have been placed in a halt to prevent any disorderly or uninformed trading."
3.20pm: RBS Morgans tells us the ASX currently has a technical problem which means that if a company makes an announcement to the market, the stock gets stuck in pre-open and the ASX doesn’t seem to be able to release the announcement and get the stock trading again.
They weren’t able to say when it will be fixed.
3.10pm: Unions say removing or reducing penalty rates for fast food, retail and hospitality workers will hurt families.
The Australian Council of Trade Unions today lodged its submission to a Fair Work Australia review of the awards system and responded to calls to reduce or remove penalty rates.
The ACTU says fast food, retail and hospitality workers are among the lowest paid in the country, and taking away their penalty rates would make life unaffordable for many of them.
3.07pm: Mercedes-Benz said it made a commercial rather than political decision to pull sponsorship from Sydney radio station 2GB, after its breakfast host Alan Jones was revealed to have said that the Prime Minister's father had "died of shame."
On October 1, Mercedes-Benz also told its NSW dealers that it had withdrawn approval for them to advertise on the show. Those dealers had already ended their contract with 2GB on 19 September, but were serving out one month's notice.
Mercedes-Benz today said in a statement today: "These decisions were commercial decisions and were in no way politically motivated as inferred by some media outlets."
2.59pm: As we approach the last hour of trade, here's a look at how markets around the region are performing:
- Nikkei(Japan): -0.4%
- Shanghai: +2%
- Taiwan: -0.2%
- South Korea: +0.3%
- Singapore: +0.1
- New Zealand: -0.2%
2.47pm: Large commercial and industrial users of electricity have been hit by a surge in power prices since the July 1 introduction of the carbon price, as some electricity companies appear to have taken advantage of the change to hike consumption charges.
Research by energy efficiency consultant Big Switch Projects into the effect of the July 1 carbon price on electricity bills of a range of businesses found price rises of as much as 53 per cent since mid-year.
The carbon price added 11 per cent, on average, to the bill although the actual ‘carbon charge’ listed on the bill varied from 5 per cent to 15 per cent, reflecting changes to other components of the bill.
2.36pm: The ASX200 is now up 28.1 points, or 0.6 per cent, to 4510. Among the sectors, miners are up 1 per cent, financials are up 0.6 per cent and energy stocks are up 1.5 per cent.
2.21pm: The Qantas chief executive, Alan Joyce, has lambasted the NSW Premier, Barry O’Farrell, for ruling out the need for a second airport in Sydney and claims ‘‘he is wrong on this’’.
Speaking in Canberra, Mr Joyce has also dismissed the benefits of a high-speed train link between Sydney and Canberra, which has been touted by the Premier, matt O'Sullivan reports.
2.08pm: Tokyo stocks have fallen 0.36 per cent following declines amid fresh concerns about the global economy and Europe's debt problems.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange is down 31.99 points at 8831.31, while the broader Topix index of all first-section issues has lost 0.43 per cent, or 3.16 points, to 733.97.
1.58pm: Australia’s unemployment rate is expected to have risen in September, confirming fears the jobs market has weakened in recent months.
AAP’s survey of 17 economists has revealed a median forecast for unemployment to rise to 5.2 per cent, from 5.1 per cent in August.
The ABS releases monthly labour force data on Thursday. AAP’s survey also predicted total employment to grow by just 5000 - not enough to keep up with population growth.
1.49pm: “There’s a lack of bad macroeconomic news out there to push the Aussie lower,” Andrew Salter, a strategist at ANZ tells Bloomberg.
“Anything that takes a euro catastrophe out of the equation is positive for risk sentiment.”
Gains in iron prices have also underpinned the Aussie, he says.
The Australian dollar has added 0.4 per cent to $US1.0234 after touching $US1.0149 yesterday, the lowest since July 13.
1.37pm: The NSW government is hoping to jump on the back of Queensland’s coal seam gas boom by increasing its investment in the controversial industry.
NSW Resources Minister Chris Hartcher has told a CSG conference in Brisbane the state is a ‘‘little brother’’ to its northern neighbour in terms of CSG development.
Mr Hartcher says Queensland’s CSG industry employs 18,500 people, while NSW’s only employs 232.
‘‘So NSW clearly has a long way to go if it’s going to successfully and responsibly develop its coal seam gas industry,’’ he has told the Australian Petroleum Production and Exploration Association conference.
1.26pm: Japan's current account surplus expanded 4.2 per cent in August from a year earlier, official data shows, the first monthly rise since last year's quake-tsunami disaster and nuclear crisis.
The surplus in the current account, the broadest measure of Japan's trade with the rest of the world, stood at 454.7 billion yen ($5.8 billion) in August, the finance ministry said, slightly beating market expectations.
That was the first monthly expansion since February 2011, a positive sign for Japan's economic recovery after last year's March 11 disasters triggered the worst nuclear accident in a generation.
The latest monthly reading was higher than forecasts by economists surveyed by Dow Jones Newswires and the Nikkei business daily, who estimated a surplus of 442.0 billion yen.
1.12pm: The mining boom has helped cut unemployment in regions well away from Queensland’s coal mines or West Australia’s iron ore deposits, the Reserve Bank says.
RBA deputy governor Dr Philip Lowe says demand for workers in the mining sector has had a positive effect on the employment rate nationwide.
Even though industries like manufacturing and construction had struggled in recent years, there had been relatively little variation in the unemployment rate across the country, he says.
Half of Australia’s 68 regions have an unemployment rate of below five per cent, he said, while only three had an unemployment rate of above eight per cent.
12.59pm: Hong Kong stocks are 0.49 per cent higher, despite falls on US and European markets sparked by concerns about eurozone debt and the health of the global economy.
The benchmark Hang Seng Index is up 102.27 points to 20,926.83 in early trade.
12.52pm: Oil and gas giant Total has signed five licensing agreements with Oil Search to operate for the first time in Papua New Guinea.
The deal means both companies will hold equal interests in each of the five licences in the onshore and offshore Gulf of Papua New Guinea region of PNG.
‘‘The completion of this transaction will mark the first entry of Total Exploration and Production into PNG,’’ Oil Search says in a statement.
Sydney-based Oil Search said the focus of the transaction was to explore and develop the prospective offshore gulf and eastern forelands area.
12.38pm: Some grim news for white-collar workers: improvements in technology, the strong dollar and increasing global competition have sent 80,000 service sector jobs overseas in the past four years, according to a report by the Melbourne-based National Institute of Economic and Industry Research.
NIEIR estimates that 20,000 jobs a year in the areas of clerks, accounting, banking and technical support are moving overseas because of technology improvements, the portability of jobs, and the availability of skills abroad, as well as the impact of the strong dollar, which has traded above parity with the greenback for almost two years.
The erosion of the sector suggests time is running out for Australia to remain globally competitive in higher-skilled service-based industries.
"The window to build a place in the global industry is closing as other players occupy strategic positions," the report said. "There is a danger facing Australia now that not only will we fail to take a role in the global market but that we will de-skill our workforce by moving key parts of the service sector off-shore."
12.31pm: As the ASX200 edges back above 4500 points, the dollar - trading at $US1.0234 - is getting some support from the recent sharemarket rally, CMC Markets foreign exchange dealer Tim Waterer says:
- There is a feeling in markets the currency, which dropped 3.5 US cents in the week to Monday, has been oversold.
- We’ve had some bargain hunters come in during the past 24 hours, so it’s not really any surprise that we have had that bounce back.
- The stock market is higher and some of that has filtered through to the Aussie dollar.
12.28pm: Seven West stocks are extending their rally, adding another 4.7 per cent and taking its recent rally since last week's record low to more than 20 per cent. Here's a chart showing the share price over the past month:
12.20pm: The order book of BHP Billiton's five-year bond offer is at least $700 million and is being marketed at 95 basis points over the Australian bank bill swap rate, two fund managers looking at the offer told Reuters.
The issue, launched earlier today, is the first Australian dollar bond offered primarily to local investors for BHP in 11 years, according to one of the fund managers. The borrower is rated A+ by Standard & Poor's and A1 by Moody's.
12.12pm: Miners are up after the price of iron ore surged 6 per cent to $US110.40, bringing its price recovery to 27 per cent from three-year lows hit in September.
No. 3 iron ore miner Fortescue Metals Group has jumped 5.7 per cent, while Rio Tinto has risen 1.8 per cent. Mid-cap miners Atlas Iron rose 3.6 per cent and Northern Iron gained 4.6 per cent, recouping some recent sharp losses.
"Iron ore prices went up quite aggressively so that is helping them along. Most of these companies would have a decent margin at these levels," says Patersons Securites senior dealer Martin Angel.
11.56pm: Billabong, fresh from announcing Ian Pollard as its new chairman, may still find itself short of board members following its shareholder meeting this month with investor advocates recommending that at least two directors be dumped.
The Australian Shareholders Association has recommended that Billabong founder, Gordon Merchant and Colette Paul be dumped for their role in rejecting a $3.30 a share offer from private equity group TPG.
11.46am: The IMF may have downgraded its forecast for Australian growth in 2013 to 3 per cent, from 3.5 per cent, but that's still much better than most OECD countries are faring, so it didn't take too long for Wayne Swan to come out with some chest-thumping, given Australia overtook beleaguered Spain in the International Monetary Fund’s latest World Economic Outlook:
Swan this morning hailed Australia’s new standing as the world’s 12th largest economy as a remarkable achievement.
‘‘As a country with the world’s 51st largest population, this is a remarkable achievement,’’ Swan said in a statement. ‘‘(It) demonstrates the Australian community’s hard work and resilience, as well as the government’s sound economic management, during a time of global economic upheaval.’’
Since 2007, when Labor came to power, the local economy has passed South Korea and Mexico as well.
11.37am: Economist Stephen Koukoulas notes the dollar is nearly back where it was when the RBA cut rates last week, a development the central bank can't be too happy about:
The fact that the AUD is only a smidge lower than when RBA cut last week makes the Nov cut close to certain— Stephen Koukoulas (@TheKouk) October 9, 2012
The dollar was trading at $US1.0369 before the RBA announced its cut and hit a low of $US1.0149 yesterday.
11.33am: The dollar is trading at the day's high, at $US1.0229, on the back of the NAB business confidence index, having slowly edged higher since this morning.
11.31am: Moves to stimulate the US and European economies helped lift Australian business confidence in September.
The National Australia Bank monthly business survey found confidence among businesses improved in September but remains downbeat.
The survey’s business confidence index rose from minus three points to zero in the month.At the same time, the business conditions index fell from zero to minus three points.
11.25am: The materials sub-index is the best-performing sector on the market this morning. Companies doing well include:
- Intrepid Mines: +5.00%
- Foretescue: +4.58%
- Atlas Iron: +3.77%
- Resolute Mining: 3.70%
- Gindalbie Metals: 3.39%
11.18am: Following the release of the IMF's latest World Economic Outlook, here's how the fund's outlook for Australia compares with its view of the prospects for the rest of the world:
- Australia: 3.3% (2012), 3% (2013)
- World: 3.3%, 3.6%
- Asia: 5.4%, 5.8%
- United States: 2.2%, 2.1%
- Europe: 0.1%, 0.8%
11.15am: In more aviation news, Air France-KLM and Etihad Airways have announced a codesharing agreement in the first phase of what could become a broader strategic partnership, AFP reports. Air France, which has hit financial headwinds, also unveiled a similar deal with Air Berlin, the sixth biggest European carrier. The agreements, which allow each airline to offer service provided by its partners, will cover destinations in Europe, the Middle East, Asia and Australia, the statement says. It represents "the first phase of a much larger strategic partnership."
11.11am: Stocks are up and, following the release of the IMF's report into the global economy, so is the dollar. It's sitting at $US1.0226, from $US1.0202 early today and up three quarters of a US cent from its low yesterday of $US1.049.
11.05am: An hour into the day's trading and - as the chart above shows - things are looking quite positive. The All Ordinaries index is 19.1 points higher, or 0.4 per cent, to 4521.1, while the benchmark S&P/ASX200 is 19.6 points higher, or 0.4 per cent, to 4501.5.
11.02am: BHP has started marketing its first sale of Australian dollar-denominated bonds in more than a decade.
BHP is offering five-year notes yielding about 95 basis points more than the asset swap rate. ANZ and CBA are managing the benchmark-sized sale, according to an emailed statement from Commonwealth Bank.
The sale will be Melbourne-based BHP’s first in the Australian currency since 2001.
Benchmark sales are usually at least A$500 million. BHP, which is spending about $1 billion a month on its ore mines in Australia, sold the equivalent of $US5.4 billion of notes denominated in euros and British pounds on September 19 in its biggest-ever offering.
11.00am: The chief executive of South Africa's embattled national airline and two senior managers have quit their jobs, a week after the chairwoman and seven board members walked out. South African Airways has not divulged the reason for chief executive Siza Mzimela's resignation. "The airline views these resignations as a turbulence of a temporary nature which must not be allowed to affect its ability to discharge its core function in a responsible and prudent manner," the airline says.
10.54am: Aquila Resources, down 1.12% yesterday on news of a $1.4 billion cost blowout at its West Pilbara Iron Ore Project is down another 1.89% already this morning. The cost increase for the port, rail and mine project was primarily blamed upon a need to spend more to accommodate WA Government requirements linked to the proposed new facility at Anketell point.
10.51am: Seven West Media is building on yesterday's strong performance. The company's shares added 4.1% yesterday on rumours of a takeover by its majority shareholder, Seven Group. In early trade today, Seven shares are the strongest gainers on the ASX200, up 4.71%, 6.5 cents, to $1.34. At the same time, Seven Group shares have lost 2.03% already this morning.
10.46am: A quick reminder - we get the National Australia Bank’s business confidence survey for September at 11.30am. Full coverage here when it arrives.
The last survey showed overall business confidence fell 5 points to -2 in August, from 3 in July, as slowing growth in China triggered falls in key commodity prices and prompted the delay or cancellation of major expansion plans such as BHP Billiton's Olympic Dam and Port Hedland's outer habour.
10.42am: The big banks are also doing well this morning:
- CBA is 0.16% higher to $56.68
- ANZ is 0.63% higher to $25.68
- NAB is 0.31% higher to $26.29
- Westpac is 0.23% higher to $25.91
10.38am: After a slightly tentative start, both the All Ords and the ASX200 are now 0.2% higher. Energy stocks are up 0.5%, Metals and Mining 0.5% better off and Industrials are showing a 0.4% gain. Infotech companies are a long way behind the general market with a 0.6% drop.
10.36am: Iron ore traded in China again overnight after the Golden Week holiday. It rose from $US104.20 a tonne to $US110.40. As a result the big miners have posted strong early gains. Rio Tinto is up 1.46% at $55.70, BHP is 0.26% higher at $33.335 and Fortescue is 3.1% stronger at $3.825.
10.31am: Billabong shares are 2 per cent higher in early trade after the company announced Dr Ian Pollard would join the board as chairman elect and interim chair of the audit committee on October 24.
Dr Pollard, a fellow of the Australian Institute of Company Directors, says he is looking forward to working with the board as Billabong rolls out its transformation strategy. Private equity firm TPG is carrying out due diligence on Billabong after offering $695 million to take over the retailer in July.
Jitters about the potential buyout arose last week when it was reported that TPG was concerned about some of its findings, causing an 18 per cent share dive on Thursday.
‘‘While the global economic environment remains challenging, the inherent recognition and strength of Billabong’s key brands positions the company well,’’ Dr Pollard said in a statement on Tuesday.
Billabong shares have added 2 cents to $1.03.
10.27am: And here are some of the worst-performing companies on the ASX200 so far this morning:
- APN News & Media: -3.66%
- Mirabella Nickel: -3.37%
- Alumina: -3.26%
- Bluescope Steel: -1.65%
- Aquila Resources: -1.51%
10.24am: Now for the companies doing well in early trade on the ASX200:
- Gindalbie Metals: +4.07%
- Aristocrat Leisure: +2.53%
- Seven West Media: +2.35%
- Atlas Iron: +1.99%
- Fortescue: +1.75%
10.20am: Now here are some of the early sliders on the ASX200:
- Infotech: -0.5%
- Consumer staples: -0.3%
- Telecoms: -0.1%
10.18am: Looking at the sub indices on the ASX200 which are higher in early trade:
- Metals and Mining: +0.3%
- Health: +0.3%
- Energy: +0.3%
- Industrials: +0.2%
- Utilities: +0.2%
10.14am: In early trade, the All Ordinaries index is 3.5 points higher, or 0.1 per cent, to 4505.4, while the benchmark S&P/ASX200 is 3.5 points higher, or 0.1 per cent, to 4485.4.
10.06am: Surfwear retailer Billabong has announced that Dr Ian Pollard will join the board as a director and chairman elect. Billabong had previously announced that chairman Ted Kunkel would step down. Dr Pollard has been chairman of Just Group and a director of OPSM.
9.56am: Australian bond futures are higher but will likely trade in a narrow range due to an absence of major local economic news. Westpac senior market strategist Damien McColough said local bond futures moved higher overnight, following earlier weakness in the contracts. He said the move showed strong underlying demand for Australian bonds.
‘‘It shows there are buyers for these assets in the dips,’’ he said.
‘‘I don’t expect a huge amount of direction today, to be honest,’’ he said.
At 8.30am AEDT, the December 10-year bond futures contract trading at 97.065 (implying a yield of 2.935 per cent), up from 97.025 (2.975 per cent). The December three-year bond futures contract was at 97.680 (2.320 per cent), up from 97.640 (2.360 per cent).
9.50am: Although gold and oil were down overnight, China iron ore posted a strong gain after not trading during last week's national holiday in China. It rose $US6.20 to $US110.40. The big miners also rose in overnight trade. BHP added 0.16 per cent on Wall Street and Rio added 0.73 per cent.
9.47am: Economist Stephen Koukoulas says today's IMF data doesn't discourage further rate cuts:
IMF unusually gloomy. If it is half correct, the RBA will need to keep cutting. Still looking for 2.5% cash rate next year— Stephen Koukoulas (@TheKouk) October 8, 2012
9.43am: Some analyst rating changes for today:
- Aristocrat Leisure raised to 'buy' at Deutsche Bank
- Fleetwood Corp cut to 'hold' from 'buy' at RBS
- Bank of Queensland cut to 'hold' at Deutsche Bank
- Bank of Queensland cut to 'hold' from buy at RBS
- Bank of Queensland cut to 'sell' at Citi
- Orica cut to 'neutral' from 'buy' at Citi
9.40am: As well as trimming the outlook for Australia, the IMF has cut its forecast for Chinese economic growth for this year and next, saying stimulus efforts have so far failed to deliver an expected boost.
The Chinese economy was expected to grow 7.8 per cent in 2012 and 8.2 per cent in 2013, the IMF said. Both figures are below the Fund's most recent estimates in July of 8.0 per cent growth for 2012 and 8.5 per cent for 2013. The July forecasts were in turn lower than an IMF estimate in April.
9.35am: In news this morning, the IMF has trimmed its 2013 forecast for Australia's economy and warned of sluggish global growth for this year and next.
However, the Fund says unemployment is only likely to rise slightly, and the wave of mining investment has insulated the nation against much of the slowing in Asia.
In its latest World Economic Outlook, released this morning, the Fund says Australia's economy will grow by 3 per cent next year, a downgrade from its previous April forecast of 3.5 per cent. More here.
9.32am: Another down night for offshore markets has Aussie stocks pointed to a flat start. Commodities were also off, but the Aussie recovered some of yesterday's losses. So although stocks don't have strong leads in either direction, there are some negative forces at play.
For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:
- The SPI was 3 points higher at 4483
- The $A was trading at $US1.0202
- In the US, the S&P500 lost 0.35% to 1455.88
- In Europe, the FTSE100 lost 0.5% to 5841.74
- Gold lost 0.3% to $US1775.70 an ounce
- WTI crude oil lost 70 US cents to $US89.18 a barrel
- RJ/CRB commodities index lost 0.91% to 307.62
9.30am: Good morning everyone. Welcome to the Markets Live blog for Tuesday.
Contributors: Thomas Hunter, Richard Hughes, Jens Meyer, Peter Litras
This blog is not intended as investment advice
BusinessDay with agencies