Australian shares put on a solid performance today, but gains were capped as investors hesitated ahead of a key Spanish bond auction.

5.02pm: That's all for today. Once again, thanks for reading this blog and sending us your comments.

Here's the evening wrap.

4.48pm: Property developer Stockland will cut executive bonuses after a review of its remuneration policies.

Australia’s largest developer began a review last year to ‘‘more closely align executive remuneration with the interests of securityholders’’ and to ensure the company’s policies reflected best practice.

Managing director Matthew Quinn agreed to receive no increase in fixed pay in fiscal 2013 while his maximum possible short-term incentive bonus had been reduced from 200 per cent to 125 per cent.

4.36pm: Prime Minister Julia Gillard has criticised mining companies for re-launching an advertising campaign attacking the government over taxes.

The Minerals Council last week resumed its Keep Mining Strong campaign, breaking a truce negotiated by Ms Gillard in mid-2010 after she ousted Kevin Rudd and sealed a deal for a revamped resource profits tax.

Ms Gillard told a business forum in Perth today the government had gone out of its way to consult with the resources sector on tax reform, following a tax summit last year and the formation of the business tax working group.

4.24pm: Meanwhile, European stock index futures are pointing to a slightly higher open for equities, ahead of the much anticipated Spanish bond auction.

Futures for Euro Stoxx 50, Germany's DAX and France's CAC are up 0.1 to 0.2 per cent.

And futures on Wall Street's Standard & Poor’s 500 index have gained 0.3 per cent.

4.19pm: Other markets around the region aren't faring quite as well as the local one. Japan's Nikkei average is down 0.8 per cent, reversing the previous session's gains, while Seoul's Kospi is down 0.3 per cent.

4.15pm: Among the sectors, consumer stapled led the gains, rising 0.9 per cent. Materials added 0.7 per cent and energy stocks gained 0.5 per cent. Financials slipped 0.1 per cent, while property trusts lost 0.6 per cent.

4.12pm: The market has closed. The benchmark S&P/ASX200 index rose 14 points, or 0.3 per cent, to 4362.7, ending well below the day's high. The broader All Ords gained 14.1 points, or 0.3 per cent, to 4441.3.

3.59pm: Germany’s economy will expand 2 per cent in 2013, accelerating from 0.9 per cent this year, financial daily Handelsblatt reports, citing forecasts to be presented today in Berlin by the country’s leading economic institutes.

Economic growth may push down Germany’s deficit to 0.2 per cent of gross domestic product in 2013, equal to about 5 billion euros, the group says.

3.48pm: Forex investors are similarly reluctant to bet on further rises in the dollar ahead of the Spanish bond auction.

The Aussie is hovering around $US1.0350, having touched a session high of $US1.0388 after Chinese state media reported Beijing was soon to ease policy.

However, hopes of an immediate cut to the banks' reserve requirements were quickly dashed when the report cited an unnamed official saying the bank will "increase reverse repo operations at an appropriate time" and "cut the reserve requirement ratio ... to release liquidity."

All eyes are now on the Spanish bond auction, which could inflame, or calm, concerns about sovereign debt stability in Europe..

"We expect the auction to go reasonably well and that should be positive for risk," says Barclays strategist Hamish Pepper.

Poor results, however, would likely see investors sell commodity currencies with the Aussie likely to retest this week's lows around $US1.0300.

3.40pm: Heading into the final stretch of today, the market has trimmed its gains as investors turn wary ahead of tonight's Spanish bond auction.

Spain will auction two- and 10-year bonds, after drawing stronger-than-expected demand for shorter-dated debts on Tuesday. But its 10-year government bond yield shot above 6 per cent earlier this week, raising fears that the country would not be able to manage its public financing and would have to turn to an international bailout.

"I would expect a narrow range in today's trading because traders will have a 'wait and see' approach ahead of tonight's Spanish 10-year bond auction," says Miguel Audencial, trader at CMC Markets. "The result will give a good indication on how the market will perform in the next few days."

Doubts over Europe's ability to stick to harsh measures to slash high public debts began to grow when Spain abruptly relaxed its deficit targets earlier this month. Italy then said on Wednesday its priority was now to revive economic growth, delaying by a year its budget balancing goal.

3.25pm: Japan has posted a record trade deficit for the 2011 fiscal year with car and electronics exports tumbling, while energy imports soared in the wake of the Fukushima nuclear crisis.

The 2011 fiscal-year deficit hit 4.410 trillion yen ($54.2 billion), according to the finance ministry, the worst figure on record amid continuing worries about the world's third largest economy.

For decades, Japan enjoyed huge trade surpluses owing to its competitive cars, electronics and other exports.

3.12pm: Government revenue from property-related taxes rose 4.6 per cent last financial year to a whopping $33 billion despite a slump in the residential housing market, Simon Johanson reports.

Property taxes reached record levels last financial year but the increase in the amount taken slowed markedly, dampened by falling house prices and stamp duty revenues.

In 2010/11, governments made $12.3 billion in stamp duty charges.

That was up slightly from the previous year but well down from $14.2 billion peak in 2007/08 before the global financial crisis.

The biggest addition to government's coffers came from municipal rate revenues which grew nearly 7 per cent in 2010/11, providing $12.4 billion or about 40 per cent of the property tax pie, according to a report from property analysts RP Data.

3.02pm: The dollar, meanwhile, is trading close to where it started the day. It's now at $US1.0360.

2.45pm: UK-based HSBC Bank has priced its first international renminbi bond issue to fulfil investor demand and pave the way for more bond issues in the Chinese currency, Chris Zappone reports.

The 2 billion renminbi senior unsecured bond was priced with a yield of 3 per cent and received a robust level of interest from investors, HSBC said.

‘‘The transaction saw very strong demand from both European and Asian investors with over half of the allocation going into European accounts,’’ said HSBC co-head of global markets Spencer Lake.

“We are delighted to have priced this trade which shows the bank’s commitment to broadening the RMB investor base.’’

2.19pm: - Asian markets are mixed this afternoon as dealers cautiously await the bond auction in Spain, while Wall Street provided a soft lead after falling on disappointing corporate earnings.

Tokyo has slipped 0.57 per cent, while Hong Kong is up 0.30 per cent, and Shanghai and Seoul are both flat.

1.58pm: Oil is higher in Asian trade but prices have been capped ahead of a Spanish government bond auction amid fears anaemic demand could reignite jitters over the eurozone debt crisis.

New York's main contract, West Texas Intermediate crude for delivery in May was up four cents to $US102.71 per barrel while Brent North Sea crude for June gained 38 cents to $US118.35 in morning trade.

1.50pm: Stocks are continuing to climb after a slowish start. As the graph above shows, the ASX200 is now up 26.7 points, or 0.6 per cent, to 4375.4. The All Ords is also up 0.6 per cent.

1.35pm: The prime minister has added her voice to calls for an interest rate cut when the RBA meets at the start of May

In a speech to be delivered today in Perth, Julia Gillard was expected to tell listeners that a projected budget surplus would give the RBA "room to move on monetary policy if it chooses to, knowing that an interest rate reduction is good for families and business".

“Should the RBA consider it appropriate to change the cash rate, this could deliver widespread benefits for households and business,” Gillard said in the speech excerpts. “A number of sectors of the economy most under strain are arguably more sensitive to interest rates.”

1.27pm: BusinessDay media writer Kirsty Simpson reports that News Corp has suspended half of the voting rights of all non-US investors after discovering it had breached US foreign ownership laws. The move affects key Murdoch backer Prince Alwaleed bin Talal, cutting his voting stake from 7 to 2.5 per cent.

The restriction on voting rights will remain in place ''for as long as the Company deems it necessary to maintain compliance with US law,'' the company said in a statement.

1.21pm: RBS Morgans private client adviser Bill Bishop said instead of slavishly following the US markets, Australian investors were more optimistic due to the ongoing growth story in Asia.

‘‘The market is reflecting a conservative outlook, but we’re mildly happy at the moment,’’ Mr Bishop said. ‘‘There are no dramas. The market has edged up, money wants to come in but investors are cautious.’’

1.11pm: Telstra shares have lost 0.7 per cent to $3.335 after the telco doused expectations of a share buyback.

Malcolm Maiden writes that "optimists were hoping for a bigger post-Easter egg from Telstra than they got this morning".

Instead of detailing plans to rapidly swing some of the cash it is getting to co-operate with the national broadband rollout Telstra announced how the money would flow - in franked dividends - but said investors would would need to wait.

Payments to Telstra from the NBN, for the provision of infrastructure for the fibre rollout including pipes and ducts already in place for Telstra's old copper wire network will generate excess cash of between $2 billion and $3 billion in the next three years.

Full story

1.05pm: Markets now showing gains of 0.4 per cent for the day, extending the five and a half month closing high hit yesterday as energy firms Woodside Petroleum and Santos, as well as miner Fortescue Metals, gain after production updates. But the rise may not climb much beyond the current mark, says Miguel Audencial, a trader at CMC Markets.

"I would expect a narrow range in today's trading because traders will have a 'wait and see' approach ahead of tonight's Spanish 10-year bond auction," he said.

"The result will give a good indication on how the market will perform in the next few days. There is potentially good upside if yields are low. However if Spain's cost of debt breaches the 6 per cent barrier, expect a sell-off in equities and commodity instruments and a shift to the safe haven of US and German Treasuries to emerge."

12.59pm: Asciano has reached agreement with the Maritime Union of Australia (MUA) on a new enterprise agreement for container terminal workers across Australia.

The agreement follows 20 months of negotiations, and strike and industrial action that has cost Asciano more than $15 million. Asciano owns the Patrick terminals and logistics business.

‘‘We believe we have reached a positive outcome for all parties and are pleased to be in a position to put the agreement to our employees for vote and deliver the benefits of the agreement to our employees and customers,’’ Patrick director Alistair Field said in a statement.

It's shares are 0.8 per cent higher, or 4 cents, to $4.79.

12.53pm: Something to read with lunch. BusinessDay journo Michael West takes a look at tearaway oil stock Interoil:

For some, especially the short-sellers on its share register, Interoil appears a gigantic con. Look no further than its connections with colourful Vancouver stock promoter Carlo Civelli, they say, and its perennial penchant for over-promising and under-delivering.

For others, Interoil is deadset cheap. It claims to have discovered an "elephant", as they say in the industry parlance; a gas field called Antelope 1 with a flow rate of 382 million cubic feet of gas and 5000 barrels of condensate a day - a world record no less. And that's just Antelope 1. Antelope 2, they claim, is even bigger.

Full story.

12.46pm: Survey of a potential oil and gas field in Western Australia by Origin Energy has been delayed to allow wheat farmers to sow crops for the upcoming season.

A 100-square-kilometre seismic survey was to be conducted at North Erregulla, south-west of Geraldton, with up to 66 million barrels of oil and 300 billion cubic feet of gas believed to be in reserve at the site.

Origin is to pay 80 per cent of the survey cost, and will take a 40 per cent interest in the joint permits alongside Empire Oil and Gas and Norwest Energy.

12.43pm: The Aussie dollar has traded in a narrow range of between $US1.0350 and $US1.0358 today.

Oz Forex foreign exchange dealer Carly Pickering said the currency slipped late on Thursday morning after a survey showed a drop in business confidence.

The NAB business survey showed confidence fell into negative territory at minus one points in the March quarter, from plus one points in the previous quarter. The result indicates the number of businesses who are negative about the outlook outweigh those who are positive.

‘‘The Aussie has been trading a little bit directionless this week and that survey has pushed it a little lower today,’’ she said.

12.29pm: While stocks are extending their gains, the dollar lost some ground after the fall in business confidence.

The dollar is trading at $US1.0358, down from $US1.0385 on Wednesday afternoon.

Oz Forex foreign exchange dealer Carly Pickering says the currency slipped after the NAB survey showed a drop in business confidence.

‘‘The Aussie has been trading a little bit directionless this week and that survey has pushed it a little lower today,’’ she says.

12.22pm: Investors can take a delay in Telstra's plans to return cash from its NBN deal, Malcolm Maiden writes.

Optimist were hoping for a bigger post-Easter egg from Telstra than they got. The cash is nevertheless building as the NBN rollout accelerates, and that's likely to limit any investor selling on today's news.

The vast majority of Telstra's shareholders are on board because of the relatively high dividend stream, 28 cents a share currently. The NBN deal underpins Telstra's status as a yield stock, regardless of when a cash flow bulge is fed back.

11.57am: And in more economic data out today: Australia's international merchandise imports on a balance of payments basis climbed 11 per cent to $22 billion in March, compared to $19.8 billion in February.

  • Imports of capital goods surged 21 per cent, or $1.1 billion, driven by a huge 67 per cent rise in machinery and industrial equipment. That was another indicator of strong business investment, particularly in the resources sector.
  • Imports of intermediate goods, like fuel, rose 9 per cent or $804 million, while imports of consumption goods increased by 6 per cent, or $317 million.
  • The big rise in imports in March will likely make it hard for the trade balance to return to surplus after a surprise deficit in February, but it also points to solid domestic demand.

11.45am: Business conditions improved modestly last quarter as sales picked up, but firms were less confident on the outlook and reluctant to hire, National Australia Bank's quarterly survey shows.

  • Its measure of business conditions edged up a point to 3 in the first quarter, a couple of points above the long-run average.
  • However, its measure of business confidence dipped 2 points to -1 with firms blaming uncertainty about the outlook for the global economy.
  • The gap in business confidence widened further between Western Australia and the rest of the country.

11.24am: Among the banks, CBA is down 0.4 per cent, ANZ is up 0.43 per cent, NAB is down 0.08 per cent and Westpac is up 0.09 per cent.

11.19am: Online retailer Catch of the Day has purchased a majority stake in wine daily deal site Vinomofo.com, building on its strategy to increase its presence in niche areas such as group buying and supermarket sales.

The price for the stake has not been disclosed.

11am: CMC Markets chief market analyst David Land said the local bourse was higher than expected due to gains for the big miners.

‘‘It’s a little more positive than I would have through,’’ he said. ‘‘We’re certainly seeing some of the big miners carrying on yesterday’s gains which is the main driver for the market today. That’s accounting for a big chunk of what are fairly modest gains so far, but all in all not bad considering that US lead.’’

10.55am: Fortescue's share price has added 0.51 per cent to $5.96 today. Among the other big miners:

  • BHP is 0.63% higher to $35.32
  • Rio is 0.23% higher to $66.65

10.51am: Iron ore miner Fortescue Metals Group’s production in the first three months to calendar 2012 was impacted by cyclones in Western Australia.

Fortescue mined 9.68 million tonnes of ore in the three months to March 31. That was up 41 per cent from the previous corresponding period, but down 14 per cent from the three months to December 31, 2011.

The amount of ore shipped by Fortescue in the three months to March was 8.37 million tonnes, up 44 per cent on the previous corresponding period, and down 16 per cent on the December 2011 quarter. Cyclones resulted in two separate closures of Port Hedland port in the period, delaying ship loading for about eight days, Fortescue said.

10.46am:  Property developer Stockland will cut executive bonuses after a review of its remuneration policies.The move comes amid renewed scrutiny over short- and long-term incentive packages offered to executives at Australia’s top 100 companies.

Stockland, Australia’s largest developer, began a review last year to ‘‘more closely align executive remuneration with the interests of securityholders’’ and to ensure the company’s policies reflected best practice.

10.40am: On the subject of Challenger shares, which are 3.3 per cent higher for the day, Matthew Kidman takes a look at the company today. Kidman, a former fund manager and director of WAM Capital, writes:

  • Uncertainty will always cause a stock price to fall. Most investors can come to grips with bad news, but not knowing what is going on can be a killer. Fitting into this category is the financial group Challenger (CGF). Full story.

10.33am: Looking at the companies leading the ASX200:

  • FKP Property - up 5.05%
  • Mineral Deposits - up 4.55%
  • Cudeco - up 4.31%
  • Challenger -up 3.33%
  • Dart Energy - up 3.28%

10.29am: Markets holding gains of about 0.2 per cent. Looking at the sub indices, most are higher. Telecoms has fallen, however, on the Telstra news. It is down 1.45%. Among the others:

  • Health - up 0.74%
  • Energy - up 0.4%
  • Consumer discretionary - up 0.34%
  • Materials - up 0.29%
  • Industrials - up 0.28%
  • Consumer staples - up 0.17%
  • Financials - up 0.5%
  • Utilities - up 0.5%

10.22am: Looking at a couple of the companies in the news this morning:

  • Telstra shares are down 1.6%, or 5.5 cents, to $3.30 after informing the market it expects to have between $2 billion and $3 billion in free cash flow over the next three years, but did not revealed its expectations for free cash flow beyond 2015

10.16am: Australian Pharmaceutical Industries (API), the company behind the Priceline brand, has returned to the black with a first half net profit of $18.3 million.

API unveiled the result today, saying it expected its earnings would continue improving in the second half. The company’s net profit result for the half year ended February 29 compared to a $35 million loss for the previous corresponding period.

However, revenue fell 12.5 per cent to $1.6 billion, as pharmacy distribution sales dropped $249 million largely as a result of drug maker Pfizer deciding to distribute directly to pharmacists.

10.13am: In early trade, the All Ordinaries index is 6 points higher, or 0.1 per cent, to 4433.2, while the benchmark S&P/ASX200 is 6.5 points higher, or 0.1 per cent, to 4355.2.

10.07am: Early take - local shares are flat as the market opens.

10.03am: Oil and gas producer Santos has maintained its full year production target after lifting its first quarter production and sales revenue.

Santos produced 12.4 million barrels of oil equivalent (mmboe) in the three months to March 31, up 13 per cent on the same period in the previous year.Production from new assets was the primary driver of the higher production, Santos said.

9.55am: Also out this morning, telco reporter Lucy Battersby writes that Telstra expects to have between $2 billion and $3 billion in free cash flow over the next three years, but has not revealed its expectations for free cash flow beyond 2015.

The telco also said it planned to keep its dividends unchanged for 2012 and 2013, disappointing investors hoping for a higher payout. Analysts had been expecting the company to announce an $1.5-2 billion share buyback programme over 2013-2015.

9.51am: While we're on the subject of banks, ANZ remains the only one of the big four to have raised interest rates following this month's decision by the RBA to leave rates steady.

9.47am: Speaking of the Commonwealth Bank update, improved technology and customer service were the main focus of CBA's growth plans for the years ahead, new chief executive Ian Narev said today.

Banking reporter Eric Johnston writes that Mr Narev said a focus on technology to bring about productivity improvements, a commitment to Australian-based jobs, while outlining a target to become number one in customer satisfaction among the big four banks were the bank's objectives.

In the presentation Mr Narev also pledged to cut CBA’s group cost to income ratio by 4 percentage points in as many years. However the target for CBA’s retail bank went even further with the bank pledging an 8 percentage point cut to cost to income over four years. Full story.

9.43am: Turning to local matters, there’s a bit around on the companies front today:

  • Commonwealth Bank strategy update
  • Harvey Norman Q1 sales results
  • Woodside Petroleum Q1 activity report
  • Santos Q1 activity report
  • Australand Property Group general meeting

9.40am: US markets fell a day after the best gains in a month as uninspiring earnings from tech bellwethers IBM and Intel gave investors a reason to take profits. IBM missed its revenue forecast, while investors said Intel's results failed to make a "bull case" for the stock.

The lacklustre reports from the two technology heavyweights came at the start of what has so far been a strong earnings season. A day earlier, the S&P 500 had its best day in a month as Coca-Cola Co led the day's round of solid earnings and concerns eased over the euro zone's debt crisis.

9.37am: Investors were further worried by news that Spanish banks were carrying their biggest burden of bad loans since 1994, fuelling doubts about whether the country's ailing lenders could survive without outside help.

Meanwhile in Germany, government borrowing costs dropped to a record at a sale of two-year notes. Germany auctioned two-year notes at a yield of 0.14 per cent, an all-time low, according to Bloomberg data.

9.35am: Looking at what helped pushed stocks lower overnight, Italy warned that a deeper-than-expected recession would mean the country would miss its pledge to balance the budget by two years.

9.32am: A day after posting strong gains on positive company news from the US and worries about Europe, global markets have tumbled on - you guessed it - disappointing company news from the US and worries about Spain and Italy. What it shows is just how fragile investor sentiment remains. The merest suggestion of bad news cops a swift and negative response. That return of caution overnight has local markets pointed lower today, but not drastically so.

For a full 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 Thursday.

This blog is not intended as investment advice

Contributors: Thomas Hunter, Peter Litras, Jens Meyer

BusinessDay with agencies