Buoyed by a global rally after a successful bond auction in Spain, Australian shares jumped today, with banks and the big miners leading the way.

4.50pm: That's all for today. May thanks for reading this blog and for posting your comments.

Here's the evening wrap.

4.19pm: Among blue chips, BHP surged 2.9 per cent and Rio added 2.8 per cent. The big banks gained between 0.5 per cent (Westpac) and 1.5 per cent (NAB).

4.16pm: The market's rally was led by the materials sector, which rose 2.4 per cent. Energy and financials both gained 1.3 per cent, while industrials added 1.2 per cent.

4.12pm: The sharemarket has closed sharply higher. The benchmark S&P/ASX200 index jumped 58.9 points, or 1.4 per cent, to 4347.7, while the broader All Ords gained 57.4 points, or 1.3 per cent, to 4426.2.

4.02pm: A friendly $2.25 billion takeover of 36-year-old billionaire Nathan Tinkler’s Aston Resources by Whitehaven Coal has received final approval.

The Federal Court today approved the arrangement in which Whitehaven will acquire all shares in Aston Resources, creating a $5.1 billion coal miner.

Tinkler becomes substantially richer as a result of the deal, which received shareholder approval on Monday. He holds a 32 per cent stake in Aston which the takeover values at about $720 million.

3.58pm: The Australian dollar has followed the fortunes of global equities to reclaim the $US1.04 level at which  it is currently hovering.

While the Aussie held overnight gains against the greenback, it has jumped against the yen, supported by broad weakness in the Japanese currency amid a revival in risk appetite. The Aussie rose as far as 84.72, up two yen in less than 24 hours, and was last at 84.61.

The surge followed heavy demand from margin players, particularly Japanese retail buyers, known as "Mrs Watanabes" in the market, keen on higher yields.

3.53pm: Still, the pendulum of market sentiment, which continues to be swayed by Spanish bond prices, is now favouring risk, says CMC Markets trader Tim Waterer.

  • Daily investment flows either towards or away from riskier assets are very much at the mercy of closely watched yield variances in Europe.
  • Spanish yields are the hot topic in the market, with the price activity having a direct correlation with the comfort level of traders with regards to taking on assets like shares and commodities in their portfolios.
  • The successful Spanish bond auction on Tuesday sparked the 1.5% rally in US equities, however had the result not gone as planned there is a better than average chance that US stocks would have sunk 1.5% instead.

3.46pm: Despite the market's optimism over Spain's bond auction, economists believe that Spanish banks will have to turn to the euro zone's rescue fund, the European Financial Stability Facility (EFSF), for help in covering losses caused by a property market crash which has yet to end.

Likewise, investors are fretting about how the centre-right government in Madrid can enforce deep austerity while reviving a recession-bound economy at the same time.

"They're going to need EFSF money to recapitalise the banking sector," says Carsten Brzeski, a senior economist at ING in Brussels. "I think we'll only see a real end to the Spanish misery if the real estate market stabilises.

"The underlying picture in Spain is dramatic, but is it dramatic in the way that it needs a bailout package tomorrow? No," Brzeski says. "But if you look ahead, let's say the next six months, I would not be surprised if they (the banks) have to get some kind of European support."

3.37pm: Meanwhile, the ASX200 is up 1.3 per cent and heading for its highest finish since October 28.

3.35pm: Here's how the individual markets across the region are doing:

  • Japan (Nikkei): +2%
  • Hong Kong: +1.4%
  • Shanghai: +1.5%
  • Taiwan: +0.25%
  • South Korea: +1.1%
  • Singapore: +0.6%
  • New Zealand: +1.2%

3.28pm: The better than expected result of Spain's overnight bond auction has sparked a relief rally across the region, with the MSCI Asia-Pacific ex-Japan index jumping 1.2 per cent.

"There is a sense of relief after markets cleared one hurdle, with Spanish yields falling after successful short-term debt sales," says Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.

"Markets are undergoing a consolidation phase after a strong rally earlier in the year, and if Spain's bond auctions on Thursday pass without a problem, investors will likely become more committed to risk-taking."

3.10pm: What the papers say - more big stories in overseas financial press today:

  • Repsol had tried to sell a controlling stake in YPF to a Chinese energy group before it was nationalised by Buenos Aires, according to two people familiar with the talks. One person identified the Chinese company as Sinopec, says the FT.
  • Pfizer is close to selling its infant nutrition business to Nestlé for at least $9bn, people familiar with the matter told the Wall Street Journal.
  • “Mark Carney, the governor of Canada’s central bank, has been informally approached as a potential candidate to replace Sir Mervyn King as head of the Bank of England in June next year,” the FT reports.
  • Paulson is shorting Bunds: the hedge fund manager told investors he saw eurozone problems worsening significantly, says the FT.

3.07pm: Opposition communications spokesman Malcolm Turnbull says the high cost of building the national broadband network (NBN) is likely to lead to increased prices for internet services.

Turnbull says the experience of other services supplied through government monopolies, such as electricity, show prices will have to rise in the years ahead.

‘‘Don’t be fooled. Don’t swallow the nonsense that an overcapitalised government monopoly is going to lead to lower prices,’’ Turnbull told delegates at the telecommunications industry’s CommsDay Summit in Sydney. ‘‘A heavily capitalised government monopoly is not going to reduce prices. The reverse is far more probable."

3.02pm: You think $US1 billion was a steep price Facebook paid for Instagram? That was nearly a bargain compared with the $US2 billion Instagram chief Kevin Systrom initially asked for, the Wall Street Journal reports in an article about the intense negotiations between Systrom and Facebook boss Mark Zuckerberg.

2.56pm: Investors should expect choppier sessions over the next six months as the market digests mixed news from China and Europe, but the prospect of a stronger sharemarket looks more likely by year’s end, says UBS equities strategist David Cassidy:

  • Any relapse in the European debt crisis remains the main near-term threat to share value growth but “the risk of systemic upheaval is seemingly reduced” after the European Central Bank doled out more than 1 billion euros in low-cost loans to lenders since December to ease liquidity fears for those banks.
  • In the current climate, the ASX200 could rise to 4700 by year’s end, helped also by a rosier outlook for China’s growth. 
  • “With valuations reasonably attractive, particularly versus government and corporate bonds, we retain a moderately positive view for 3-6 month returns,”  he says.

2.45pm: Petsec Energy has booked a plunge in first quarter revenue after US production and gas prices fell.

Net revenue for the three months to March 31 came in at $US1.8 million, down 62 per cent compared to the same period in 2011. It also unveiled a previously flagged $US600,000 loss and warned its earnings were likely to remain in the red for the short term.

Petsec’s revenue slump was partly attributable to a 30 per cent fall in the average gas equivalent sales price received by Petsec during the period.

Shares were flat at 18.5 cents.

2.39pm: Brazil's Vale is the last of the big three miners (BHP, Vale, Rio) to post a drop in first-quarter iron ore production to 70 million tonnes, from 82 million tonnes in the fourth quarter.

Like the other two, Vale says it was hit by bad weather, a factor that has helped support iron ore prices at relatively high levels despite signs of a softening market.

The falls in output come as competition heats up in global bulk commodities markets due to demand from China for imported industrial raw materials finally showing signs of waning after years of double-digit growth.

At $US149.20 a tonne, iron ore prices are 22 per cent below last year's highs.

2.33pm: Some more from overseas. Despite yesterday's surprisingly successful Spanish bond auction, the eurozone debt crisis is far from over, Nouriel "Dr Doom" Roubini says:

  • Economies that use the euro probably will shrink further as governments cut spending and banks seek to lend less, the New York University Professor says: “It’s like a slow-motion train wreck.”
  • Greece won’t be the last euro-zone country to restructure debt and may exit the euro in 2013 or 2014 along with another small country, the co-founder of Roubini Global Economics who predicted the GFC says.
  • Roubini also says he doesn’t expect a self-sustaining recovery in the US anytime soon.
  • The so-called BRIC countries of Brazil, Russia, India and China are “over-hyped” and require reforms to sustain growth, he says.
  • And China, which may face a “hard landing” in a few years, needs to grow private consumption as a percentage of gross domestic product.

2.27pm: Chinese home prices fell in March from a year ago, the first annual drop since the government launched measures two years ago aimed at cooling the sizzling property sector.

Average new home prices across China fell 0.7 per cent last month from March 2011. They dropped 0.3 per cent from February, marking the sixth consecutive month-on-month decline.

While Beijing's policy moves have started to show results, officials warned that property inflation could revive even as some economists fretted that a deflationary trend could discourage investment, posing downward risks for the world's No.2 economy.

2.21pm: Afternoon update for Asian markets... Tokyo is up 1.67 per cent higher by the break, Hong Kong added 0.93 per cent, and Shanghai was up 0.54 per cent, while Seoul rose 0.95 per cent.

2.12pm: A breakout of enteritis among Yellowtail Kingfish is causing financial concerns at Clean Seas Tuna.

The South Australian aquaculture company is reviewing the future of its yellowtail kingfish operations in the Spencer Gulf after 35 per cent of juveniles were wiped out by an infection of the intestines.

Tests are continuing to determine the cause of the health problems. Clean Seas shares are down 0.2 of a cent, or 4.2 per cent, to 4.6 cents.

2.04pm: Oil prices, meanwhile, are mixed in Asian trade as concerns over Europe's sovereign debt crisis continue to niggle investors, despite Spain's above-target bond auction.

New York's main contract, West Texas Intermediate crude for delivery in May is up three cents to $US104.23 per barrel while Brent North Sea crude for June shed 11 cents to $US118.67.

"Brent remains weighed by concerns about the debt situation in Europe despite the successful bond sale in Spain... Things could change easily and investors have an eye on that," Justin Harper, market strategist at IG Markets Singapore, tells AFP.

1.55pm: Gold is trading flat this afternoon after a successful Spanish debt auction eased fears about the eurozone debt crisis, but the upside is capped as the euro remains under pressure ahead of a longer-term debt sale in Madrid later this week.

Spot gold is little changed at $US1649.89 per ounce, after touching a one-week low near $US1634 in the previous session.

1.45pm: Macquarie Bank is seeking to flex its muscles at Coalworks by calling for a shareholder meeting to be held to dump the chairman and managing director, Brian Robins reports

In a notice lodged with the stock exchange today, Macquarie Bank said it is seeking to remove two Coalworks directors, Mr Wayne Mitchell, the chairman and Mr Andrew Firek, the chief executive and managing director.

It wants to replace them with two of its nominees, Mr Anthony Ferguson and Mr Johann Jooste-Jacobs.

1.37pm: Nickel miner Mincor Resources has reported a lift in third quarter output and says it is on track to meet its full-year production targets.

Mincor shares are up three cents, or 4.38 per cent, at 71.5 cents.

The miner says its Kambalda operations near Kalgoorlie in Western Australia produced 2,683.4 tonnes of nickel-in-ore in the March quarter, up 29 per cent against the previous period.

1.23pm: National Australia Bank currency strategist Emma Lawson says the dollar has rebounded from the positive news coming out of Europe.

"There was a little bit of profit-taking at the start of the day but it's generally just continuing that positive sentiment."

Ms Lawson says that, with major domestic economic data releases scheduled for this week, the currency's movements will be driven by events offshore, including the second Spanish bond auction and a meeting of G20 finance ministers.

"I think we will just continue hovering around this level as we wait for those bigger events later in the week."

1.14pm: Shares in Grange Resources have taken off after the iron ore pellet producer reported an improvement in first quarter production from its Savage River mine in Tasmania.

Grange shares ae up 3.5 cents, or 6.19 per cent, at 60 cents.

The company says the Savage River mine has produced 573,625 tonnes of concentrate in the three months to March 31, up 64 per cent compared to the first quarter of calendar 2011 when it was recovering from a rock slide that occurred in mid-2010.

1.06pm: The big banks are higher: ANZ is up 1.2 per cent,  CBA is up 1 per cent, NAB has gained 1.2 per cent and Westpac is 0.8 per cent higher. 

12.59pm: Mining giants BHP Billiton and Rio Tinto are still leading the change - up 1.8 per cent and 2.4 per cent respectively. Fortescue Metals is also up 1.8 per cent.

12.51pm: Hong Kong has followed the region's markets higher - opening up 0.94 per cent higher after the IMF's improved outlook for world growth inspired buyers around the world.

The benchmark Hang Seng Index is up 193.48 points higher at 20,755.79.

12.44pm: Banking writer Eric Johnston reports that the planned stock market listing of the Australian arm of mortgage insurer Genworth Financial has been pushed back until early next near, after the insurer’s profits have came under pressure following a jump in payouts.

Genworth’s US parent had previously targeted the second quarter of 2012 for the timing of a initial public offering of up to a 40 per cent stake in the mortgage insurer.

Bullish estimates had put the value of a listing at as much $850 million, although many institutions questioned whether the market could support such a valuation.

12.31pm: A note from Rio Tinto on China here. Rio's head of copper says China’s copper demand will grow more than 8 per cent annually in the next five years as the country uses more of the metal to develop its power infrastructure.

Continuing Chinese copper demand will reduce stockpiles of the metal in the second half of this year, said Andrew Harding, the head of Rio Tinto Group’s copper division.

Copper for delivery in three months on the London Metal Exchange has declined 4.7 per cent in April on concerns that Chinese growth will slow. China is the world’s largest copper user, buying more than a third of global output.

12.24pm: Although Australian shares have rallied to their highest in two weeks today, with top miners and banks leading a broad-based rebound, there's still a note of caution among traders, says Justin Gallagher, head of Sydney sales trading at RBS.

"The biggest issue is we're not seeing engagement in any material way. Volumes are still appalling domestically and we're going to need to see a trend of positive data before we start to see those volumes return with any kind of passion," he said.

12.18pm: The All Ordinaries index is 52 points higher, or 1.2 per cent, to 4420.8, while the benchmark S&P/ASX200 is 54.6 points higher, or 1.3 per cent, to 4343.4.

12.12pm: Stocks are holding firm well above 1 per cent higher. Despite the strength seen on the sharemarket today FW Holst research manager David Spry said investor interest was "still pretty spasmodic".

There was no consensus yet that the market broadly had improved and that the risk of further jitters like those that dogged stocks last year had passed, said Mr Spry.

"Generally there is a bit of a fear out there," he said. "I don't think we're over that situation. You've got to get a bit more consistency and a bit more confidence."

12.01pm: At midday, the dollar is still hovering around $US1.04 - now at $US1.0398.

"I think it's a pretty fair bet we'd run with the positive sentiment for now," Sean Callow, a senior currency strategist iat Westpac tells Bloomberg.

"We've seen a pretty big move on the likes of Aussie and kiwi. I think they can test a little bit higher on the day."

11.53am: Bankwest is the latest bank pulled into the class actions targeting high fees in the sector, the lawyers behind the action have announced.

Litigation funder IMF (Australia) says the action will be filed on behalf of 6600 BankWest customers. The firm will argue Bankwest is still charging controversial exception fees and will seek to recoup $10 million worth of these back for claimants.

The law firm has already taken action against eight banks claiming for more than 1600 customers, with proceedings ongoing.

11.46am: In the US, Apple's results will be dissected more closely than ever next week, after a share fall raised concerns on Wall Street that the stock's gravity-defying rally may be losing steam, Reuters reports.

Five straight days of stock losses for the world's most valuable company have sparked fears it has ventured into dreaded bubble territory and is overdue for a strong pullback. Shares reversed course on Tuesday, gaining 5 per cent.

More cautious investors are re-evaluating their positions and cashing in some holdings ahead of Apple's earnings update on Tuesday.

11.42am: Westpac chief economist Bill Evans says the weak and patchy growth trend means the RBA has a strong case for easing the cash rate at its next meeting.

"Following the release of the board minutes for the previous meeting on April 3 it is apparent that the case for a rate cut is strong," he says.

"The board is concerned about the sharp differences between sectors and regions, recognises that there is a significant fiscal tightening, and notes that non-mining investment was likely to remain sluggish.

"There is a clear observation that, subject to the inflation outlook remaining benign, there is scope to cut rates."

11.37am: The Australian economy continues to perform weakly, with the Westpac-Melbourne Institute leading index of economic activity, which indicates the likely pace of activity three to nine months into the future, posting an annualised growth rate of 2.4 per cent in February.

This placed it below its long-term trend of 2.9 per cent, Westpac says.

It is the sixth consecutive month with a below-trend reading.

11.32pm: The big retailers haven't been impacted by the Amazon news. David Jones is up 1.7 per cent, JB Hi Fi is up 1.6 per cent, Harvey Norman is up 0.8 per cent, but Myer is up just 0.2 per cent - trailling the ASX200's 1.3 per cent gain.

11.16am: Australian shares are not the only ones in the region enjoying a bounce today. Tokyo stocks opened 1.37% higher after overnight surges on overseas markets. The Nikkei 225 index at the Tokyo Stock Exchange opened up 129.59 points at 9,594.30. The MSCI Asia Pacific Index gained 0.9% to 124.75.

11.10am: Interesting item here from commercial property writer Carolyn Cummins.

It’s a move that will make Australia's bricks and mortar retailers shudder. Amazon - the world's largest online retailer - is in the market for a local warehouse in Australia as part of its massive global distribution network.

The global giant, which made its name as an online book seller, is now said to be turning its eyes to the Asia-Pacific region.

10.59am: As the cloud of economic uncertainty continues to lift, we could begin to see investors wading back into the market, says one analyst. Donald Williams, chief investment officer at Platypus Asset Management in Sydney, says the ‘‘environment for equities is pretty good”.

“Even though 2012 is going to be a tough year because most of Europe will be in recession for a large part of this calendar year, you are still looking at a global growth rate of 3.5 percent, which is a pretty decent growth rate.”

10.54am: The big banks are also higher but not showing the sort of gains enjoyed by the miners:

  • CBA is 0.98% higher to $50.59
  • ANZ is 1.39% higher to $23.32
  • NAB is 1.33% higher to $25.18
  • Westpac is 0.82% higher to $22.16

10.46am: Mining stocks are having a good day on the IMF's more robust view of global growth and two major investment houses upgrading the outlook for Australian miners. UBS and JPMorgan said signs of better signs of better economic growth data in China in the second half of this year would be a big positive for Aussie miners:

  • Rio Tinto has added 2.2% to $66.09
  • Fortescue, the country's third biggest iron ore exporter, gained 1.9% to $5.90
  • Alumina, producer of the material used to make aluminum, added 1.1% to A$1.197. 

10.41am: The All Ords now showing a gain of 1.2 per cent and the ASX200 is 1.3 per cent higher.

10.37am: And to the companies lagging the market:

  • Alacer Gold Corp - down 1.38%
  • Sundance Resources - down 1.09%
  • Billabong - down 0.35%
  • Centro Retail - down 0.27%
  • Wotif.com - down 0.21%

10.33am: To the companies leading the ASX200 higher:

  • Energy World Corporation - up 6.14%
  • Regis Resources - up 4.59%
  • Linc Energy - 4.52%
  • Perseus Mining - up 4.46%
  • Energy Resources Australia - up 4.19%
  • Iluka Resources - up 3.2%

10.24am: "I'm ok!" That's the message from Warren Buffett after revealing he was last week diagnosed with prostate cancer.

Buffett, in a letter to Berkshire shareholders, said he had been diagnosed with Stage I prostate cancer last Wednesday and would undergo radiation treatment beginning in mid-July. Imaging tests revealed no cancer elsewhere in his body, he said.

"The good news is that I've been told by my doctors that my condition is not remotely life-threatening or even debilitating in any meaningful way," the 81-year-old investment guru said.

10.19am: All sub indices trading in positive territory so far:

  • Materials - up 1.60%
  • Industrials - up 1.36%
  • Health - up 1.17%
  • Energy - up 1.17%
  • Financials - up 1.16%

10.16am: Shares in Bank of Queensland are moving higher roughly in line with the broader market after delivering a $90.6 million first half loss, with the cost of bad loans weighing on the lender.

Its shares are 1.3 per cent higher, or 9 cents, to $7.05.

10.12am: The Australian share market has opened more than one per cent higher. The benchmark S&P/ASX200 index was up 49.2 points, or 1.15 per cent, at 4,338.0, while the broader All Ordinaries index was up 48 points, or 1.10 per cent, at 4,416.8.

10.07am: Early take - shares 0.6 per cent higher as the market opens.

10.04am: BHP shares have rocketed higher after reporting an 8 per cent drop in iron ore production over the past three months. They've added 1.5 per cent, or 52 cents, to $34.67 in early trade.

9.56am: And continuing a busy morning in company news, Westfield Group says it will sell off eight shopping centres in the US for $US1.15 ($A1.11) billion so it can pay down debt and invest in developments like the new World Trade Centre.

The shopping centre giant said Starwood Capital Group would own the majority interest in seven of the centres while the eighth, Eastland, is being sold in a separate transaction. Westfield co-CEO Peter Lowy said the sales represented another step in the company’s strategic plan to increase return on equity and long-term earnings growth.

9.54am: Perseus Mining says it is on track to deliver on its gold production targets for the June quarter. The Perth-based company on Wednesday said production from its Edikan mine in Ghana was 38,796 ounces of gold in the three months March 31. That production came at a cash cost of $US723 ($A700.48) per ounce.

9.51am: In other local companies news, Bank of Queensland has posted a $90.6 million first half loss, with the cost of bad loans weighing on the lender. BOQ had flagged the result in March, when it launched a $450 million capital raising to strengthen its balance sheet.

The loss for the six months to February 29 is a turnaround from a $48 million profit in the previous corresponding period, and is due to impairment costs of $328 million on loans.

9.46am: BHP, meanwhile, has reported an 8 per cent drop in iron ore production over the past three months thanks to the destructive impact of the recent cyclone season.

Resources writer Peter Ker reports that BHP said the 38 million tonnes produced was 14 per cent better than the March quarter of 2011, and the company did not expect annual iron ore production forecasts from the Pilbara region to change.

A slip in iron ore production was anticipated, particularly after Rio Tinto surprised the market with a bigger than expected fall in production yesterday.

9.43am: Locally, a quiet day on the economics news front, with only the Westpac-Melbourne Institute leading indexes of economic activity due out.

9.41am: The IMF update and news of the Spanish debt sale helped Wall Street to a 1.5 per cent gain and helped benchmark indexes to their biggest rallies in a month. Good earnings reports helped to push things along.

IBM, Intel and Yahoo all beat earnings estimates in their reports after the closing bell. Earlier in the day, Coca-Cola, Goldman Sachs and Johnson & Johnson all reported profits that beat analysts' estimates, in what has been a strong start to earnings season.

"People were very pessimistic, marking down earnings expectations so there was plenty of room for the market to be positively surprised," said Paul Zemsky, the New York-based head of asset allocation at ING Investment Management.

9.38am: Also easing tensions in Europe overnight, a sale of Spanish government debt exceeded expectations. Spain sold 3.18 billion euros of debt, compared with the Treasury's maximum target of 3 billion euros. The mood was further improved when the ECB said markets had "overreacted" with to Spain's debt problem.

9.35am: Looking first at what gave offshore investors reason to be optimistic overnight, the International Monetary Fund hiked its global growth forecasts for this year and 2013, but warned that Europe's debt crisis and high oil prices could derail recovery. The IMF estimated global growth at an annual rate of 3.5 per cent this year, accelerating to 4.1 per cent in 2013.

The International Monetary Fund expected the Australian economy to expand by three per cent this year as tensions emanating from Europe and the United States continued to ease.

9.32am: Healthy gains on offshore markets overnight have local stocks well placed for a strong opening today. On the ASX24, the SPI futures index was 51 points higher, or 1.2 per cent, to 4342. For a comprehensive look at this morning's business news, check today's need2know and the business press digest. Here are this morning's key markets links:

9.30am: Good morning folks. Welcome to the Markets Live blog for Wednesday.

This blog is not intended as investment advice

Contributors: Thomas Hunter, Peter Litras, Jens Meyer

BusinessDay with agencies