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Markets Live: Banks, miners lead rebound

Another day, another blog. Thanks for reading and commenting, make sure to tune in tomorrow from 9.30am for another edition of Markets Live.

Click here for a full wrap of today's session.

Following on from John Garnaut's look at China and its move to shift away from coal, BusinessDay's Paddy Manning has garnered some opinion from Australia's coal industry, which doubts China will be able to cap its coal use by 2015, without abandoning its commitment to economic growth.

UBS commodities analyst Tom Price said it was ‘‘too late’’ for China to cap coal use at 4 billion tonnes, as in 2012 it consumed 4.05 billion tonnes, counting raw production of 3.8 billion tonnes plus net imports of 227 million tonnes. China’s gross coal imports jumped 32 per cent last year, he said.

Mr Price said China’s monthly raw coal production statistics did not factor in coal washing which could reduce yields and increase calorific values.

‘‘It will be hard to pin them down on this,’’ he said.

Click here for the full story.

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Here's what you need2know this Wednesday evening:


  • The ASX200 jumps 0.8%, ending a two day run of losses.
  • The dollar slides to its lowest point this year, around $US1.0347
  • The Nikkei is up 3.6%, Hang Seng up 0.7%, Shanghai down 0.1%
  • Wall Street futures are about 0.1% higher; FTSE100 futures up 0.1%
  • Gold flat at $US1672.90, while WTI oil flat at $US96.66



  • Unemployment rate: expected 5.5 per cent
  • NewsCorp (Q2): Net profit - US1.001b; Div:US10c
  • Tabcorp (HY): Net profit: 93m; Div: 10c
  • Telstra (HY): Net Profit: 1.6b; Div: 14c

Here's a look at the best and worst performers on the ASX200 today:

Among the sectors, financials and energy both gained 0.9 per cent, materials rose 0.8 per cent and consumer staples added 1.6 per cent. Telecommunications bucked the trend, falling 0.7 per cent.

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The market has finished higher, shaking the losses of the last two days. The benchmark S&P/ASX200 jumped 38.3 points, or 0.8 per cent, to 4921, while the broader All Ords added 37.9 points, or 0.8 per cent, to 4940.5.


Mongolia will press Rio Tinto to explain a spike in costs at the huge Oyu Tolgoi copper and gold mine, a government source told Reuters, warning that it could threaten efforts to finance other projects in the country.

Oyu Tolgoi, 34 per cent owned by Mongolia and controlled by Rio Tinto, produced its first concentrate last week and is on track to start supplying metal and paying royalties by June.

But the government, which is due to hold talks with Rio Tinto on Wednesday, is under pressure to plug a budget deficit and increase its share of the wealth.

A Labor MP has accused tech giant Apple of dodging tax and operating in a "cloak of invisibility" in a scathing speech to parliament.

NSW MP Ed Husic said Apple appeared unable to explain why it deserved to pay only a fraction of 1 per cent of its global turnover to the ATO.

‘‘They have a head office here, but you would not know it because they maintain a cloak of invisibility and their key management team dodge any scrutiny and refuse to even engage on public policy issues,’’ he said in a speech on the government's new international tax laws.

‘‘Given the lack of work they do on that front, you would hardly say that it cost $5.5 billion to maintain a head office here and dodge that limelight.’’

Multinationals such as Apple and Google will be forced to reveal how much tax they pay the Australian government under a plan to name and shame firms that use tax havens to doge tax.

CBA is ramping up its push into the lucrative market serving self-managed super funds and retail investors, as banks expand their presence in wealth management.

In a move planned to deliver CBA a bigger slice of the $440 billion self-managed super sector, the bank has launched a new online platform that aims to make it easier for the general population to invest in shares, fixed income and other financial assets.

The platform allows customers to invest in shares, exchange traded funds, bonds and term deposits. It also provides access to internet banking services and financial news.

Here's an interesting read from India's Economic Times, Macquarie Capital is raising a $1.06 billion fund to invest part of the money in India's structure.

Investment in infrastructure has long being the victim of partisan politics in the sub-continental nation, but with such a large institution willing to invest, times could be changing.

Click here for the full story from the Economic Times.

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BHP Billiton has told workers at its Olympic Dam project about further losses as the global miner seeks to slash costs.

The world’s largest resources company would not say how many workers would go at the massive Olympic Dam copper-uranium-gold project, after reports that more than 100 workers could lose their jobs.

Those affected will mostly be Adelaide-based contractors from its corporate human resources, finance and administration areas and not from the mine site itself.

BHP shares are up 0.6 per cent to $37.41.

With just under an hour before the close of trade, here's a look at markets are the region:

  • Nikkei(Japan): +3.1%
  • Shanghai: -0.1%
  • Taiwan: +0.5%
  • South Korea: +0.1%
  • Singapore: flat
  • New Zealand: flat

John Garnaut's exclusive on a possible imminent peak in China's coal consumption is getting some traction, both online and in the Twittersphere.

Here's a chart showing nicely just how much coal China has been burning over the past years - and that an imminent peak would mark a stunning turnaround:


Steelmaker Arrium has taken a heavy $474 million write-off against its manufacturing division, principally its Australian Tube Mills unit, since any sale of the unit will not achieve the book value of the business.

The heavy write-down reflects its view that the Australian dollar will remain overvalued and that the domestic construction industry will remain under pressure, it said.

Of the write-offs, $431 million involves its manufacturing arm and a urther $43 million off its distribution arm.

Arrium shares were down 0.5 per cent at 93 cents.

The Australian National Retailers Association, which called for a cut to the cash rate yesterday, has again pushed for a lower GST-free threshold on items purchased overseas to reduce Australians shopping on international websites.

"We estimated about 8 per cent of Christmas sales were lost to overseas competitors in the later stages of 2012," ANRA chief executive Margy Osmond said.

"Looking at these numbers, we might have to revise that number up. Retailers have come out fighting with greatly decreased prices and consumers are buying - but margins remain tightly squeezed. With three years of low growth the retail sector is now at tipping point."

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News Corp companies have been targeted again by Chinese hackers, Rupert Murdoch says.

‘‘Chinese still hacking us, or were over the weekend,’’ the News Corp chairman and chief executive tweeted today.

It comes after the Wall Street Journal claimed last week that it had been targeted by Chinese hackers ‘‘for the apparent purpose of monitoring the newspaper’s China coverage’’.

The Journal’s parent company Dow Jones, a unit of News Corp, suggested that Chinese spying on US media has become a ‘‘widespread phenomenon’’.

The New York Times and a number of other US media outlets also claim to have been targeted by hackers in recent months.

Twitter revealed on February 1 that it had been affected by a ‘‘sophisticated’’ cyber attack and that the passwords of about 250,000 users were stolen.

Financials are having a strong run today, with good performances from all of the big four:

  • ANZ: +1.4%
  • CBA: +0.9%
  • Nab: +1.1%
  • Westpac: +1.1%

Reuters has compiled some interesting reader comments on the US government's lawsuit against ratings agency S&P. Click here to see them.

And here's orginal full story.

US news

The US Federal Reserve said overnight that one of its internal websites had been briefly breached by hackers, though no critical functions of the US central bank were affected by the intrusion.

The admission, which raises questions about cyber security at the Fed, follows a claim that hackers linked to the activist group Anonymous had struck the Fed on Sunday, accessing personal information of more than 4,000 US bank executives, which it published on the Web.

"The Federal Reserve system is aware that information was obtained by exploiting a temporary vulnerability in a website vendor product," a Fed spokeswoman said.

"Exposure was fixed shortly after discovery and is no longer an issue. This incident did not affect critical operations of the Federal Reserve system," the spokeswoman said, adding that all individuals effected by the breach had been contacted.


A lot has been made of the higher Australian dollar and the adverse impact on domestic exporters, CommSec economist Savanth Sebastian says in a reaction to the tourist numbers:

  • However the same impact does not seem to be playing out when it comes to the tourism sector.
  • In fact despite the high Aussie dollar, a record number of tourists are coming to Australia, with much of the growth from China and other Asian countries.
  • And more importantly an ongoing improvement in the global economy will continue to be of benefit to the tourism sector.
  • A growing tourism sector acts to diversify income flows to the country away from resources and rural exports.
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