Stocks closed higher after recovering from a brief dip into the red but investors stuck to the sidelines ahead of the budget this evening.
5.04pm: That's all for today here at blog central. There will be plenty more activity on this website later tonight at 7.30pm when the Treasurer delivers his blog. Stay tuned.
Here's our evening wrap of today's session.
4.35pm: Meanwhile in the UK, Aviva CEO Andrew Moss has stepped down, after the insurer was hit last week by one of the biggest pay revolts ever suffered by a British company.
Moss told the company that he believed it was in the best interest of the firm for him to step aside.
Last week Moss waived his 2012 salary increase following shareholder concerns over executive pay, which culminated in half of the group's investors revolting on remuneration at its annual general meeting three days later.
4.31pm: It’s easy to see why investors are keen to buy the dips in the Australian market, CMC Markets trader Ben Taylor says:
- With the Australian bond yield curve sitting at record lows it’s evident that the RBA will make another cut at its next meeting in June.
- The RBA's fantasy fight of inflation has come to an end, it has abandoned its previous beliefs and we are finally on track to see the Australian economy re-balance as rates fall.
- Today’s trading volumes have been light ahead of the Australian government’s federal budget tonight. I believe the budget is about trying to force the RBA’s hand in lowering interest rates further.
- The government will use restricted fiscal spending to ensure the RBA has no choice but to lower rates more than would be needed if both government and RBA were in alignment.
- The subsequent falling Aussie dollar will do wonders to correct the recent Australian underperformance and we will see high yielding full franked dividends continue to outperform as confidence improves across Australia.
4.28pm: The dollar is trading round about where it was this morning, at $US1.0183, shrugging off the trade deficit news.
4.18pm: Telstra was the market's biggest driver, rising 1.6 per cent as investors sought high-yielding stocks. The big banks were mixed, with Westpac rising 0.5 per cent, ANZ and CBA flat and NAB falling 0.3 per cent. BHP gained 0.3 per cent, Rio rose 0.4 per cent and Fortescue jumped 2.9 per cent.
4.15pm: Among the sectors, materials slipped 0.1 per cent, gold fell 1.1 per cent, but financials and energy both rose 0.2 per cent, while consumer discretionary gained 1.2 per cent and telcos rose 1.6 per cent.
4.11pm: The market has closed higher. The benchmark S&P/ASX200 index climbed 13 points, or 0.3 per cent, to 4314.3, while the broader All Ords added 14.3 points, or 0.3 per cent, to 4375.9.
4.03pm: And some more in today's FT: best not to expect the European Central Bank to bail out the struggling eurozone economies. Monetary policy is no panacea, writes Bundesbank chief Jens Wiedmann in an op-ed.
3.59pm: Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender, the FT reports.
In an abrupt reversal of policy, the Spanish government, which had previously insisted that no additional state money would be needed to clean up the country’s banking sector, confirmed that an intervention was being prepared.
3.46pm: Some suggestions for budget buzzword of the year:
- working families
- fiscal prudence
- fiscal responsibility
- fair go
Any more ideas? Send us your comments.
3.34pm: Looks like we're going to end the day in the black. The materials sector is trading flat, after being down earlier, but index heavyweights BHP and Tio are both trading about 0.4 per cent higher.
But the biggest contribution to the ASX200's gains comes from Telstra, which is up 1.4 per cent, adding 2.6 points to the index's 14-point rise.
3.27pm: Japan’s largest trading house Mitsubishi Corp says its full-year net profit edged down 2.3 per cent due to rising costs and a slump at its Australian unit.
Mitsubishi said net profit was Y453.8 billion ($5.58 billion) yen in the fiscal year to March, down from 464.5 billion yen a year earlier although the result was better than the firm’s forecast of 450 billion yen.
The profit fall was partially due to an Australian coking coal project that was faced with challenges including labour troubles and poor weather, it said.
The coal mining alliance between Mitsubishi and BHP Billiton is the biggest profit-generating project for the trading house, accounting for roughly 30 per cent of earnings.
3.19pm: China will overtake Japan to become the second-largest consumer market in the world by 2020, according to a report from China's leading investment bank.
China International Capital Corp predicts domestic consumption in China will reach $US7 trillion by the end of this decade, placing it behind only the United States.
To get there, Chinese consumer spending will be growing at a rate of 13 per cent a year through this decade. Domestic consumption as a proportion of GDP will increase by 6 percentage points from 2010's level, the report says.
"During the last decade, 'Made in China' has changed the world. In the next decade, 'Consume in China' will fundamentally influence the world and China's economic order," says Peng Wensheng, the bank's chief economist, according to Caixin Media.
3.07pm: Gold is trading slightly lower, but prices are supported by bargain hunters lurking around the lower end of a recent range.
Spot gold edged down 0.1 per cent to $US1 636.20 an ounce. US gold also lost 0.1 per cent to $US1636.90.
"The sentiment in gold is likely to remain weak for a while, after the changes in European governments again triggered worries about the bloc's debt crisis and pressure the euro," said Li Ning, an analyst at Shanghai CIFCO Futures.
The decline in oil prices, which have lost nearly 7 per cent so far this month, eased concerns on inflation and
peeled off some of gold's attraction as a hedge against rising prices, she added.
2.53pm: BusinessDay's Michael West, meanwhile, has been digging into the finances of the Victorian budget, particularly those related to public private partnerships (PPPs):
Why does the state not properly monitor the financial position of its PPP owners and managers?
The Department of Treasury and Finance has transferred billions of dollars worth of public assets to private joint venture partners but won't provide their financial details.
Yet the devil, as everybody knows, lurks in the details. (Read the full tale here.) Interesting comments too.
2.43pm: Probably time for a bit of federal budget plug.
Visit this site (but probably not this blog) at 7.30pm (AEST) when we'll have a comprehensive wrap of the main budget news.
In the meantime, there's always our federal budget index to check out if you want to see the news.
2.37pm: Some more on the trade deficit, with economists saying the bigger than expected gap is likely to hit Q1 growth.
HSBC chief economist Paul Bloxham says the consistent deficit trend will contribute to weaker growth in the near term:
- The overall balance is not too far off the expectation, but it is disappointing that we’ve been in deficit for the whole of the last quarter.
- I think the main story here is that we’re likely to see a subtraction from exports in the first quarter, which is a downside risk to first quarter growth in the economy.
- To some degree we’re also seeing rebalancing in the economy - the traded side had been contributing more, and yesterday we saw that the housing numbers have levelled out a bit, and retail numbers have picked up.
Or, to put it bluntly:
Trade balance shocker to hit Q1 GDP ow.ly/1jxCdY— Macro Business (@macro_business) May 8, 2012
2.29pm: China’s stocks are down the most in two weeks after the nation’s biggest machinery maker, Sany Heavy Industry, said it may cut its sales forecast for this year and plunging residential land sales fuelled concern the economic slowdown will worsen.
‘‘The risk of economic fundamentals can’t be ignored and the road to the recovery might be bumpy,’’ says Li Jun, a strategist at Central China Securities Co. ‘‘The property market will continue to be a major drag on the economy.’’
2.13pm: Despite today's bigger-than-expected trade deficit, mining is still booming, JPMorgan economist Tom Kennedy says.
Overseas shipments were affected by weaker international demand and disruptions on the supply side such as industrial disputes in the coal industry, he says. Imports were in part boosted by purchases of capital equipment by an expanding mining industry.
‘‘You have to look at this from a long-term perspective and how the economy is going to unfold,’’ he said. ‘‘The mining boom is continuing and the capex story is still alive.’’
2.01pm: Brent crude oil is recovering slightly after four straight sessions of losses caused by fears that the slowing economies of the United States and the eurozone would reduce oil demand.
Brent crude is up 34 cents to $US113.50, but US crude has fallen for a fifth day to $US97.81, down 13 cents.
"There may have been some investor bargain-hunting, with the opinion that prices were oversold after another $US3 plunge at the start of trade," ANZ analysts led by Mark Pervan said in a note.
"Wider markets appear to be pricing in the potential for another long-term refinancing operation announcement in Europe, which will likely be supportive for oil markets going forward."
1.55pm: Shares of Iluka have slumped after the mineral sands miner said it will cut its annual production of zircon in 2012 because the global economic outlook remains unclear.
Iluka said that sales volumes of zircon in April had improved compared to the prior three months as there was some evidence of improvement in the economies of the United States and China. However, large countries in the euro zone were showing increased weakness in the face of austerity measures.
Shares in Iluka are down 10.7 per cent at $14.25.
1.36pm: Among other sectors, gold is down 0.7 per cent, energy is trading flat, consumer staples is off 0.7 per cent, but consumer discretionary is up 0.4 per cent.
1.32pm: So much for the rebound - the ASX200 has just slipped into the red, adding to yesterday's losses. The market is being pulled down by the banks and the miners, with the materials and the financials sub-index down 0.1 and 0.2 per cent respectively.
1.31pm: It's Opposition Leader Tony Abbott's "pledge in blood": to axe Labor's price on carbon. But promises to repeal complicated laws are difficult to pull off.
Deutsche Bank has looked into the Coalition's promise to scrap the carbon tax, and says it might not happen until April 2014 - nearly two years after the legislation first takes effect in July this year.
"Each step in the constitutitional process takes time, and in practice, it could take 8-14 months for the repeal bills to pass, with risks of further delay at each stage of that process," reseach analyst Tim Jordan writes.
"On that timetable, the earliest a repeal bill could pass after an August 2013 election would be April 2014, 22 months after the carbon price comes into force."
1.22pm: Time for a glance around the region, and it's a bit of a mixed picture:
- Japan (Nikkei): +0.6%
- Hong Kong: flat
- Shanghai: -0.5%
- Taiwan: +0.1%
- South Korea: +0.5%
- Singapore: +0.3%
- New Zealand: +0.25%
1.05pm: BusinessDay columnist Ian Verrender says it's pretty average timing for Wayne Swan to join the austerity club: Look for the hair shirt with a silk lining:
The world's best finance minister, the federal Treasurer, Wayne Swan, has resisted the urge for quite a while but, with the fittings now complete, will tonight don his, although some suspect it has a silk lining.
If tonight's fiscal cuts really are severe, Glenn Stevens's gymnastic expertise will be sorely tested. He could be forced to cut rates much harder than he'd like.
1.01pm: the dollar, meanwhile is trading at $US1.0176, still slightly depressed after the bigger than expected trade gap.
OzForex senior foreign exchange manager Jim Vrondas says the Aussie could continue to fall this evening following the release of Australia’s federal budget:
- It’s likely to be a pretty tough budget which could prove contractionary for the economy here.
- The government has been talking about turning that budget into a surplus, which coming at this particular point in the economic cycle could be a little bit dangerous for the prospects of the Australian dollar.
12.51pm: Back to the market, which is up about 0.2 per cent. Analysts are saying we're seeing mainly some bargain hunting after yesterday's steep losses as investors reassess the European situation.
"I think that today people are having a few second thoughts and thinking that maybe the political situation isn't that volatile in Europe and so we have bounced back a little bit, but clearly we haven't recovered all of yesterday's losses," says Damien Boey, equity strategist Credit Suisse.
"We are also waiting for the budget results tonight and it looks as if the Gillard government is extremely serious about delivering austerity, but obviously now people are concerned about the growth impact that will have and whether the RBA can counteract that in time."
12.39pm: And while we're waiting for the budget (some 7 hours to go), it's worth pointing to some more idiosyncrasies around the Treasurer's big day out:
Has prize been decided for 1st to use 'devil in the detail' in Budget comment?Any bonus for 'smoke and mirrors'?— Malcolm Farr (@farrm51) May 7, 2012
Other thing I love about #budget, all the obscure lobby groups who come out to play.— Latika Bourke(@latikambourke) May 8, 2012
What word, other than #budget, will we hear Julia Gillard and Wayne Swan say more than any other today? I'll take 'families'.— Ben Wise (@BenWiseMelb) May 7, 2012
Have you got any pet hates around the budget? send us your comments.
12.36pm: ANZ is more down to earth in its description of the surplus size: "We expect the government will forecast a small surplus in 2012-13 after some slippage in the 2011-12 deficit." The bank says:
- Most market debate will be about how budget tightening will impact the RBA’s thinking on monetary policy.
- Although the turnaround in the budget balance is projected to be the largest in Australia’s history at 2.5–3ppts of GDP, the impact on economic growth is expected to be more moderate.
- ANZ estimates the likely change in government spending in 2012-13 will lead to around a 1ppt drag on growth in that year, although it is very difficult to be precise about this estimate.
- The government is clearly hoping fiscal consolidation will result in lower interest rates and downward pressure on the AUD.
- This fiscal strategy may provide some confidence benefits, but the net impact of fiscal tightening and lower interest rates, if they occur, will be broadly neutral for the economy.
12.31pm: Talking about the budget, it's pretty certain the government will deliver its promised surplus. But how big will it be? Stephen Koukoulas offers some suggestions for the wording:
Can we use "dosai thin" rather than "wafer thin" when looking at the surplus?— Stephen Koukoulas (@TheKouk) May 7, 2012
What about a 'Keira Knightley' thin surplus?— Stephen Koukoulas (@TheKouk) May 7, 2012
Expectations are the surplus will come in at $1.5 billion, by the way.
12.25pm: Fresh from securing shareholder approval to change OneSteel’s name to the periodic table-sounding Arrium Ltd, OneSteel CEO and managing director Geoff Plummer fronted a handful of media.
Asked what he wanted from today’s budget, Plummer’s wish list was short, and centred on the government doing nothing to reduce investment confidence, and its flow on effects to employment.
‘‘They certainly understand the risk of decline. What I’d like to see is they don’t compromise in the choices and trade offs they make. The investment environment is quite brittle and vulnerable at this point, and that is across the economy’’ he says.
12.10pm: Commonwealth Bank senior economist John Peters says flooding across eastern states during the summer months and industrial action at central Queensland mines had affected the supply of coal during March.
‘‘We’re seeing some negative impact from that which is holding back exports,’’ he says.
The high value of the Australian dollar and the importing of capital goods from overseas to service the boom in mining investment had lifted imports.
However, he says Australia is likely to move back into a trade surplus once supply issues with the coal sector were sorted out.
‘‘The demand is still there and we expect to move back into trade surpluses later in the year.’’
12.05pm: At midday (AEST), the ASX200 is up just 5.9 points, or 0.1 per cent, to 4307.2.
11.57am: Rochford Capital director Thomas Averill says the bigger-than-expected trade deficit raises fears for the overall health of the Australian economy.
“This country is used to have trade surpluses rather than deficits - and not that long ago that was this case,” he says.
The terms of trade – or value of the nation’s exports divided by its imports – has consistently propped up the value of the Australian dollar and given the RBA to argue for higher rates. "The terms of trade is weakening and it gives the RBA scope to cut as well."
“Today’s deficit is reflective of the fact that Chinese imports of Australian products is slowing," said Mr Averill.
“The market on the whole is most concerned that the relatively sluggish sectors of the Australian economy have been propped up by external demand for Australian commodities,“ he says.
“If that was really going gangbusters we’d still be having a trade surplus.”
11.48am: Treasurer Wayne Swan has described his fifth federal budget as one for the ‘‘battlers’’.
The budget he hands down at 7.30pm (AEST) will support jobs, provide cost-of-living assistance to those under financial pressure, and include initiatives for some of the nation’s most vulnerable, he says.
‘‘In many ways this is a battlers’ budget,’’ Mr Swan has told reporters in his traditional budget day media doorstop heading into Parliament House.
11.45am: Hong Kong shares have opened 0.41 per cent higher as concerns over the eurozone debt crisis ease.
The benchmark Hang Seng Index is up 85 points to 20,621.65 in the first few minutes of trade.
11.40am: Early reaction to the trade data: the dollar has lost about a quarter of a cent and is now at $US1.0172. The graph above also shows stocks are now heading lower.
11.37am: Australia’s trade deficit widened in March, data from the Australian Bureau of Statistics shows.
The balance on goods and services was a deficit of $1,587 million in March, seasonally adjusted, compared with an upwardly revised deficit of 754 million in February.
Economists’ forecasts had centred on a deficit of $1.2 billion in March. During March, exports were up 2.0 per cent in adjusted terms while imports were up 5.0 per cent.
11.35am: Electronic Arts lost 400,000 subscribers of "Star Wars: The Old Republic" in the fourth quarter, dealing a blow to its efforts to rely on the new game for growth and sending the game maker's shares down as much as 10 per cent.
EA has poured more money and firepower into "Star Wars: The Old Republic" than it has any game in its 30-year history. Wall Street is closely watching to see if the game can succeed, since it could bring EA riches for years to come. If it struggles, EA's earnings will be hurt in future quarters.
Interim CFO Ken Barker says in an interview that EA is pleased with the stability of the game, but it wants to boost the subscriber base with the release of two expansion packs this quarter that deliver players more content.
The subscriber numbers EA reported missed some analyst estimates. Brean Murray analyst Todd Mitchell was expecting 1.5 million paying subscribers.
"'Star Wars' is a nice role playing game but people are playing through it and leaving," Mitchell says.
11.32am: Gold prices are steady as the backlash by voters in Greece and France against austerity measures continues to weigh on the euro, while upbeat prospects for demand in India and China, the world's top two gold consumers, lent some support to prices.
Spot gold is little changed at $US1637.49 an ounce.
11.25am: Australian sons and daughters will spend an estimated $1.36 billion this week to show how much they love their mums, with per capita spending for Mother’s Day expected to rise 3.4 per cent from last year to an average $60, according to research group IBISWorld.
A new report said most adults – aged between 15 and 64 – will open their wallets a little more with gifts averaging $88 up from $85 last year, Eli Greenblat reports.
IBISWorld general manager Karen Dobie said men and younger adults are typically the biggest spenders.
Figures in the US show that men outspend women by around 60 per cent when it comes to their mum, a trend that is also prevalent in the Australian market,’’ she says.
11.19am: The dollar meanwhile, is back under $US1.02 - settling at $US1.0196.
The Australian and New Zealand dollars “are reflecting broader, improved, more stable market sentiment,” Emma Lawson, a currency strategist at National Australia Bank has told Bloomberg. “This is just somewhat of a recovery after the bigger move that we’ve seen the previous days.”
11.13am: Aside from the early flurry, the market has spent the last hour trading in a tight range. The ASX200 is now up 15.2 points, or 0.4 per cent, to 4316.5.
11.08am: Tokyo stocks have opened 0.78 per cent higher, coming back from a heavy loss the previous day as markets digested the results of European elections.
The Nikkei 225 index at the Tokyo Stock Exchange, which lost 2.78 per cent on Monday, us up 71.36 points at 9190.50.
11.03am: BHP Billiton has filled the holes left by its recent executive changes, with two new division presidents appointed this morning, Peter Ker reports.
BHP's president of minerals exploration, Ian Maxwell, has been promoted to lead the company's energy coal division, filling the gap left by Jimmy Wilson, who will soon take over as BHP's top iron ore man.
Mr Maxwell will be replaced in the exploration role by Danny Malchuk, who is currently a vice president in BHP's base metals division.
The appointments continue a six month period of significant change within the corridors of power at BHP, which has included Ian Ashby's recent decision to step down as iron ore boss, the sacking of Jon Dudas as the company' aluminium boss, the shifting of Graham Kerr out of the diamonds division and the departure of Chief financial officer Alex Vanselow.
10.58am: RBS Morgans Brisbane equities director Bill Chatterton says European markets had taken a closer look at the election of France’s first Socialist president in nearly two decades, Francois Hollande, and taken a more positive outlook.
‘‘At first it was perceived quite negatively,’’ he says. ‘‘But the market have been thinking it through a bit more and it's bounced back from the initial falls.’’
10.52am: Shareholders at OneSteel have just approved the name change to Arrium - 98.69 per cent backed the name change, 1.31 per cent opposed it.
10.51am: Is an early end to the long-running class action against the directors of failed property group Centro at hand?
Litigation funder IMF, which is backing one of the three cases brought against directors, entered a trading halt this morning, to continue until the earlier of ‘‘an announcement concerning the Centro matter’’ or the start of trade on Thursday morning.
According to court records, hearings before Federal Court judge Michelle Gordon started at the beginning of March and are set to run through to the end of June.
10.46am: More on Leighton... The company puts the March quarter loss of $80 million down to heavy losses on the desalination plant project in Victoria and also the Airport link project in Brisbane, Brian Robins reports.
Leighton chief executive Hamish Tyrwhitt says he is disappointed with results from the two projects which have detracted from the otherwise sound performance of the business.
"The deterioration of $148 million before tax for APL and $106 million before tax for VDP results in a quarterly loss for the 3 months to 31 March of $80 million after tax and minorities. Despite these losses, the portfolio of projects is performing well," he says.
The group has around $45 billion of work in hand, with a further $11.5 billion that runs out beyond five years, he says.
Along with these two projects, Leighton is facing ongoing difficulties with parts of its operations in the Middle East.
10.42am: Just weeks from a multi-billion-dollar debut on the US stock market, Facebook has ramped up its focus on mobile lifestyles with the purchase of ‘‘social discovery’’ start-up Glancee.
Glancee founders behind the smartphone application for finding like-minded people nearby joined the Facebook team in what was seen as a talent grab by the Menlo Park, California-based social network.
‘‘We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds,’’ says a message on the San Francisco startup’s website.
Financial terms of the Glancee purchase have not disclosed but are believed to be far less than the billion dollars Facebook recently spent on the startup behind photo-sharing smartphone application Instagram.
10.38am: It's a mixed bad among the banks: ANZ is down 0.6 per cent, CBA is down 0.1 per cent, NAB has gained 0.2 per cent and Westpac is up 0.4 per cent.
10.34am: Telstra has committed to buying at least $5.02 million of satellite equipment and product bundles over the next 12 months from World Reach subsidiary Beam Communications.
World Reach, in a statement, says the initial shipment, worth $US1.6 million ($1.57 million), will be delivered by June 30.
Telstra’s purchase includes Beam satellite docking stations and Iridium handsets.
Beam says: ‘‘The order follows work completed by Telstra, Beam and Iridium to better address the communication needs of customers in the mining, transport, emergency services, relief aid, and recreational (maritime and four wheel drive) segments.’’
Telstra share are up 4 cents, or 1.1 per cent, to $3.60.
10.29am: The commonwealth will investigate Wilton as a site for a second Sydney airport despite the NSW government’s opposition to the project.
Federal Transport Minister Anthony Albanese says the government will initiate a ‘‘detailed investigation into the suitability of Wilton’’.
It will involve preliminary economic, social and environmental studies into the site on Sydney’s southwestern fringe.
‘‘The government is committed to increasing Sydney’s aviation capacity in a bipartisan and consultative manner,’’ Mr Albanese says.
10.24am: Stocks briefly were as high as 0.6 per cent - but as the graph above shows, some of the early gains have disappeared as quicky as they came. The ASX200 is now up 13 points, or 0.3 per cent, at 4314.3. An early indication of another unsteady day on the market? Let us know where you think stocks will end today in our markets poll.
10.20am: Zircon producer Iluka has seen its shares plunge this morning after reporting it had trimmed its expected output of the mineral to about 430,000 tonnes.
Iluka shares were down as much as 11 per cent, or $1.75, to $14.20.
Leighton shares, meanwhile, are up as much as 32 cents, or 1.7 per cent, to $19.57 after confirming its full-year profit guidance of $400-450 million.
10.17am: Among the big miners, BHP is up 0.9 per cent, Rio is up 1 per cent, and Fortescue has gained 2.3 per cent.
10.14am: Commonwealth Bank has cut rates on its one-and-three-year fixed-rate home loans, following the Reserve Bank’s cut last week.
The rate on a three-year fixed rate loan fell by 34 basis points to 5.99 per cent, while the one-year fixed home loan rate fell by 15 basis points, also to 5.99 per cent, effective today on loans worth more than $150,000.
“We believe that for customers looking for certainty when it comes to their home loan repayments, our one and three year Fixed Rate Home Loans will be attractive options for them,” says Commonwealth Bank executive general manager retail products Michael Cant.
CommBank cut 40 basis points from its standard variable rate last week, taking it to 7.01 per cent, as banks battle for frugal consumers' business.
10.11am: Among the sectors in the early minutes of trade, materials are up 0.6 per cent and the financials and industrials indexes are up 0.5 per cent.
10.06am: Construction group Leighton has reported an unaudited loss for the March quarter of $80 million. It is, though, sticking to its expectation of posting a full-year profit of $400-$450 million.
10.03am: Early take: stocks are up 0.3 per cent.
10am: Shareholders of listed steel, mining and mining consumables company OneSteel will vote this morning on a board proposal that it ditch its distinctive name in favour of the new monicker, Arrium.
Chairman Peter Smedley said in an announcement to the ASX this morning that while OneSteel had been a ''very good name for us in the past'', in recent years it had been an ''impediment'' to marketing the company to investors, Leonie Lamont reports.
In presentation documents, the company detailed its changing profile from a predominant steel-maker to a diversified company. While steel is still its biggest division - accounting for 47 per cent of assets - mining consumables now accounts for 27 per cent, mining 16 per cent, and steel recycling a further 9 per cent. Mining and mining consumables accounts for 37 per cent of revenue.
If approved, the new company name will come into effect on July 2, when the company will be listed as Arrium Ltd, and its ticker will change from the current OST to ARI.
9.55am: IG Markets analyst Stan Shamu says he expects ''to see a mild recovery in cyclical stocks at the start of trade today, but a cautious tone is likely to persist".
"BHP’s (US listed) ADR is pointing to a 1.2 per cent gain to $34.99," he says. "This is encouraging, particularly after the bloodbath we saw in the resource space yesterday."
"Orica will be a stock to watch today after its fairly positive report was overlooked yesterday due to the broad sell-off."
"Ahead of the open, we are calling the Aussie market up 0.6 per cent at 4329."
"This is not too surprising considering the massive slump we saw in equities into the close of yesterday’s session," said Mr Shamu.
9.50am: The dollar is edging higher in the minutes for the market opens. It's now at $US1.0211.
9.46am Suncorp market analyst Darryl Conroy says US stocks were buoyed by stronger-than-expected consumer credit, which more than doubled to $US21.4 billion in March.
"Consumer credit rebounded strongly in March, which was viewed as both positive and negative for the US economy," he says.
"The positive camp see a lift in confidence to borrow, whilst the negative suggest student loans are up because they cannot find jobs."
"[Today in Australia] markets may just consolidate, as punters digest the election outcomes,” says Mr Conroy.
9.42am: Earlier, all eyes were on Europe to see how markets would respond the day after elections in Greece and France. While futures suggested another day of heavy losses, the outcome was very different. Here's a wrap of European markets.
9.36am: HiFX senior trader Stuart Ive says global markets rallied following earlier concerns about the support for anti-austerity parties in the French and Greek elections.
''What we saw whenever European markets opened was a degree of calm.''
''This followed growing calls for the European Union to concentrate on both growth and austerity measures, which seem to have been well-received by the market, even though, in the background, we still have the Greek parliamentary candidates unable to put together a parliament.''
''At the end of the day, for people in the European Union, looking at the austerity measures and the lack of employment, and lack of growth, the fact that someone's standing up and saying we need to focus on growth has been viewed as slightly positive,'' he said.
9.32am: Aussie shares appear to be in for a better sesssion today after a rough start to the week. For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:
What you need to know
- SPI futures are 32 points higher at 4322
- The $A is higher at $US1.0199
- In the US, the S&P500 rose 0.04% to 1369.58
- In Europe, the DAX gained 0.12% to 6569.48
- Gold fell $5.90 to $US1639.30 an ounce
- WTI crude oil fell 57 cents to $US97.92 a barrel
- The Reuters Jefferies CRB Index rose 0.1% to 297.46
- Australian business news digest - May 8
9.30am: Good morning folks. Welcome to the Markets Live blog for Tuesday.
This blog is not intended as investment advice
Contributors: Peter Litras, Peter Hannam, Jens Meyer
BusinessDay with agencies