Australian shares close near three-week highs, led by banks and miners, as some confidence returns to the market ahead of a key German court decision on the eurozone's bailout fund and a two-day Fed meeting.
- BHP's Nasser slams Queensland tax grab
- Dollar extends rally on iron ore jump
- Consumers shrug off mining gloom
Markets are running higher on 'hopium'.
5.45pm: Oops, in the excitement over the German court ruling we completely forgot to close this blog. Apols to anyone out there still waiting for updates.
Here's our evening wrap. Good night.
4.53pm: The big one to look out for tonight is the German Constitutional Court's ruling on whether Europe's new bailout rescue fund, the European Stability Mechanism, is compatible with German law. The ruling is due from 6pm, AEST.
The judges will have to decide if by signing up to the fund Germany is surrendering control of its own finances, thereby surrendering a part of its sovereignty.
If the judges approve the ESM - as is widely expected - and the fiscal pact (which puts controls on countries' budgets), the eurozone will have a powerful new weapon to deal with struggling member states.
But if the court in Karlsruhe were to defy expectations an uphold injunctions against the bailout fund in its ruling, it could devastate bond and currency markets and plunge the eurozone into turmoil by depriving it of funds to keep debt-laden southern states afloat.
Legal experts believe the eight judges in the court's Second Senate will back the treaties, based on its previous rulings that have allowed integration while insisting on full consultation with the Bundestag (lower house).
4.42pm: After a very restrained start to the week, the ASX200 broke the shackles today with investors clearly liking what they heard from the Chinese Premier regarding potential stimulus which had a comforting effect on the Australian market, says CMC Markets trader Tim Waterer:
- A willingness from Chinese officials to act on stimulus as needed was all that markets needed to hear, with Iron ore price rebound telling the story.
- The resulting rise in commodity prices translated into it being a solid day for the mining stocks, whilst the banking stocks also made the most out of the better vibe on global markets ahead of some key events.
- The German constitutional court ruling as well as the FOMC announcement on monetary policy are keenly awaited events and hopes are high that favourable outcomes will be achieved by both.
4.35pm: Some other strong performances among top 200 stocks:
- Ramelius: +9.9%
- Gindalbie: +8%
- Saracen: +7.5%
while on the other side of the ledger:
- Emeco: -5%
- APN: -3.45%
- Pacific Brands: -3.4%
4.32pm: Here's how some of the blue chips performed today:
- BHP: +0.8%
- Rio: +1%
- ANZ: +0.4%
- CBA: +1.6%
- NAB: +1.3%
- Westpac: +1.6%
- Fortescue: +3%
- Woolies: flat
- Wesfarmers: -1%
- Telstra: +0.8%
- Qantas: -0.4%
4.23pm: Strong gains in the big banks and miners were the main contributing factors to today's rise. Financials added 1.2 per cent, materials gained 1.1 per cent, while utilities shed 0.8 per cent.
4.15pm: The market has closed higher. The benchmark S&P/ASX200 index climbed 35.5 points, or 0.8 per cent, to 4361.3, while the broader All Ords rose 34.8 points, or 0.8 per cent, to 4383.1.
3.59pm: Fortescue shares are doing OK today, up 2.7 per cent, but CBA says the miners may need to raise up to $2 billion in equity if the price for a tonne of iron ore stays below $US110.
CBA also said Fortescue's decision to slow its expansion plans was "value destroying", but decided to keep its rating for the stock on "hold".
The iron ore price jumped to just above $US100 overnight, extending a four-day rally.
3.57pm: Channel Ten’s audience figures in August were the ‘‘worst since the turn of the century’’ as viewers abandoned the network in favour of Olympics coverage on free to air and pay television.
During the Olympic month more people watched Foxtel than Ten, which had just 21 per cent of the national audience, according to figures compiled by Credit Suisse research analyst Samantha Carleton.
‘‘While some allowance can be made for the impact of the Olympics, Ten also lost significant share to Seven as a string of new shows failed to fire,’’ Ms Carleton wrote in a note to clients.
A string of Ten’s home-made shows have failed to boost ratings — including Everybody Dance Now, which was hosted by chairman Lachlan Murdoch’s wife, Sarah Murdoch, and cancelled on August 21, The Shire, Can of Worms and Don’t Tell the Bride - while teen drama Puberty Blues has rated ‘‘passably against tough competition’’, according to Ms Carleton.
Ten's shares were trading 2.6 per cent lower at 37 cents this afternoon after hitting a five-year low of 36.5 cents last week.
3.51pm: And while we're with the ACCC: the regulator is taking a Victorian business to the Federal Court over allegations it misled businesses, who were not customers, by saying they owed them money for the supply of printer cartridges.
Artorios Ink will also face charges that it falsely claimed it had launched legal proceedings in the Magistrates’ Court to force businesses to pay up.
3.45pm: The competition watchdog has indicated it may be unable to deal with claims of anti-competitive behaviour by the major supermarket chains.
A recent report from independent supermarket group Master Grocers Australia (MGA) called on the Australian Competition and Consumer Commission (ACCC) to investigate whether Coles and Woolworths were misusing their market power. MGA said the supermarket giants were cross-subsidising a large number of loss making supermarkets in order to lessen competition in the grocery sector.
The ACCC is considering the claims, chairman Rod Sims said, but indicated it would be difficult to pursue the matter.
‘‘By way of background, in order to meet the tests of conduct being against the law and anti-competitive, it has to be behaviour which is deliberately meant to damage competition,’’ he told an Australasian Convenience and Petroleum Marketers Association conference.
3.41pm: The Australian dollar is nudging $US1.05 on hopes the United States and China will take more action to boost their economies, and that a German court will back the eurozone's bail out fund.
The Aussie this afternoon powered up to a three-week high of $US1.0490, driven by stop-loss buying as resistance gave way, and is currently trading at $US1.0476.
Reports that Spain's Prime Minister is considering asking for EU aid also gave a boost to risk sentiment.
"Markets are running higher on 'hopium'," says David Scutt, a trader at Arab Bank Australia.
Traders reported broad Aussie buying interest in the crosses, particularly Japanese and model funds.
3.29pm: Bit more on the steel/iron ore price front.
Reuters notes steel futures in Shanghai are off 0.2 per cent today (to about $530 a tonne), adding to yesterday's 1 per cent retreat. That decline is adding to views that the iron ore price surge over recent days (12% on Monday-Tuesday) may be running out of puff.
"Iron ore prices could continue to gain over the next week or two, but I still question the long-term sustainability of this given the weak steel fundamentals," Rory MacDonald, iron ore broker at Freight Investor Services, told Reuters.
For one thing, the $150 billion or so pledged by China for new subway lines, bridges, and so on, will take time to roll up (and to absorb steel supplies.)
Meanwhile, Commonwealth Bank remains bullish about iron ore prices: "We believe prices will rebound to average $US131 (a tonne) in 2013 reflecting renewed steel demand in China capped by new low-cost
capacity coming online."
Fortescue shares, for the record, are holding on to gains of about 3.4% with about half an hour to go for the day. That almost constitutes a quiet day for the stock after dropping 5.1% yesterday, reversing some of the 7.3% advance on Monday and 11.5% rally last Friday.
3.11pm: A bit more on the QE3 debate, which is bound to heat up ahead of the Fed meeting that starts overnight:
What's the pointof more QE if all it does is shave a few basis points off U.S. bond yields.It's all a bit of a waste of time.— James Glynn (@JamesGlynnWSJ) September 12, 2012
3.09pm: Spain is considering asking help from the European Central Bank's bond-buying program but is not planning a full sovereign bailout, Prime Minister Mariano Rajoy has told Finnish newspapers.
Last week the ECB agreed to launch a new bond-buying program to lower struggling eurozone countries' borrowing costs.
"In addition to growth, the only option I am considering is using the central bank's announced mechanism," Rajoy said, according to Helsingin Sanomat.
"It is completely outruled that we would ask for a bailout for the whole country," he told business daily Kauppalehti.
3.05pm: Been wondering what all the QE3 hype is about and why monetary policy is failing to solve the US jobs crisis?
Check out this post on BusinessInsider by Mike Konczal, who uses animated .gifs to break down the "most critical theoretical debate of our time".
2.51pm: Standard & Poor's has announced its quarterly reshuffle of the S&P/ASX indices. Here are the main changes:
- S&P/ASX100: Aristocrat Leisure will replace JB Hi-Fi
- S&P/ASX200: Drillsearch Energy, SAI Global, Skilled Group to be added; Aquarius Platinum, Panoramic Resources and Ramelius Resources leave
The changes will be effective September 21, after the close of the market.
2.47pm: Housing starts posted a stronger than expected rise of 4.6 per cent in the second quarter, prompting CBA economist James McIntyre to observe:
- The recovery in housing construction activity looks to have begun. More contemporaneous trends in building approvals confirm this observation.
- This is a potentially important offset for an economy which is dominated by resources investment and is facing concerns about lower commodity prices.
- We are not expecting the nascent housing upswing to be as vigorous as the stimulus boosted surges of 2001 and 2008.
2.38pm: Mirvac, meanwhile, has a confirmed sighting of its new CEO, and the time she takes over, as BusinessDay's Carolyn Cummins reports:
Diversified property group Mirvac has moved to placate investor dissent by announcing the starting date of its new chief executive Susan Lloyd-Hurwitz will be November 5.
This is about six weeks earlier than first hinted at in mid-August, when the chairman James MacKenzie surprised shareholders with news that the long-standing incumbent Nick Collishaw was to be replaced.
Investor response to Ms Lloyd-Hurwtiz's starting date was positive, with the shares rising 1.1 per cent to $1.43.
That earlier CEO action had raised the ire of fund managers who staged a war of words with Mirvac, which included seeking the dismissal of Mr Mackenzie.
2.30pm: The latest on the Xi Watch - or the hunt for China's next leader - is, well, short of a confirmed sighting:
Chinese authorities and media remained silent on the whereabouts of Vice President Xi Jinping on Wednesday, with rumours and speculation spreading over why Beijing was not more forthcoming on the health of its president-in-waiting.
Xi has skipped meetings with a number of visiting leaders and senior officials over the past week, including U.S. Secretary of State Hillary Clinton, because of what sources told Reuters was a possible injury to his back suffered while swimming.
But Chinese officials have refused to give any explanation for Xi's absence from the public stage, giving rise to bizarre speculation on the country's Internet rumour mill. According to various theories being floated, the 59-year-old Xi has had a stroke or heart attack, was the target of an assassination attempt or was secreting himself, preparing for war.
Xi has not been seen in public since September 1 and the continued unwillingness of the government to impart any information on the health or whereabouts of the man who is essentially China's president-elect was beginning to cause unease overseas.
(Shanghai stocks, meanwhile, are off 0.4 per cent, reversing an earlier gain of 0.8 per cent.)
2.24pm: The dollar continues to edge higher...reaching $US1.0482 in recent trading before edging back towards the $US1.047 mark. It remains near its highest against the greenback since August 24.
Stocks, meanwhile, are also hovering at about three-week highs, with the ASX200 at about the 4360 point mark.
The banks are contributing the most to the market's advance (with CBA's 1.7% gain the biggest single contributor.) Wesfarmers, involved in a 'dirty tricks' tiff with Woolies, is the biggest drag on the index, with the stock off about 0.8 per cent for the day.
2.05pm: BusinessDay's Michael Pascoe has filed: States ignore their revenue crisis:
The verdict is in on the Queensland budget. Having built up expectations of genuine reform and prepared the state for what lies ahead, it turns out that Campbell Newman is just another politician primarily interested in getting elected and as happy as any to fiddle the figures to suit. Oh dear.
And then there's New South Wales, hacking at its education spending after 18 months in office, more likely a sign of cuts to come than the solution to a problem. And South Australia has had its credit rating trimmed. And, well, fill in your state's fiscal challenges here, with the only comfort being that you're not Tasmania – unless, of course, you are Tasmania.
It's not the headline “bad” part of the Queensland budget that damns it – the public service cuts – but the dishonesty in trying to tell the public they can have more for less while proffering petty bribes and baubles. The ill-considered attempt to shovel all the revenue pain on to the state's metallurgical coal mines is as dangerous as the Bligh government's over-generous pay rises for a feather-bedded public service.
1.48pm: Some more strong quotes from Nasser's speech today:
"I would suspect that many coalmines in Queensland today will be cashflow negative."
He said the constant talk of a two-speed economy to justify "handicapping" the mining industry "was driving him nuts".
"Why would you take a good athlete and shoot him on the left foot?"
Nasser said he did not know if the bottom of the current slump had been reached but said he was bullish about China in the long-term.
"Going through what we are going through is a wake up call for everyone."
1.45pm: BHP Billiton chairman Jacques Nasser has slammed the Queensland goverment's decision to hike coal royalties as "unbelievable" and "counterproductive".
Speaking at a business lunch in Melbourne, he hit out and the introduction of the mining and carbon taxes, calling on both federal and state governments to "stop fiddling" and work closer with industry.
He said the Queensland government's decision to raise coal royalties from 10 per cent to 12.5 per cent would heap further pressure on miners already struggling under declining coal prices, a high Australian dollar and high labour an capital expenditure costs.
1.39pm: Citi equities have started covering M2 Telecommunications with a 'buy' recommendation and target price of $4.60. Shares have risen 7 cents in today’s trading to $3.45.
Citi’s research team believe M2’s recent acquisition of retail internet provider Primus, future opportunities on the National Broadband Network and its track record on the small to medium business segment as positives for the company.
The biggest risks to the company are any major alterations to the NBN or if Telstra improves its focus on M2’s target market.
Analyst Ross Barrows estimates M2’s yield will increase from 5.3 per cent in 2011-12 to 8.2 per cent by 2014-15.
1.31pm: The market's gains are being led by both miners and banks, with the materials sector up 1 per cent and financials rising 1.1 per cent.
Bell Potter senior adviser Stuart Smith says a little bit of confidence is beginning to creep into the market.
‘‘The banks are underpinning this move,’’ he says. ‘‘It is good to see the banks bolstering the resources move.‘‘I have a feeling that confidence will keep us going ahead ever so steadily.’’
1.24pm: The dollar has extended its strong overnight rally, hitting an intraday high of $US1.0482 just moments ago, on expectations of policy action from the United States and China to boost their economies.
St George senior economist Jo Heffernan says there are several factors supporting the local currency:
- Ratings agency Moody’s warned that it might reduce the US’ Triple A credit rating. That was negative for the US dollar and, therefore, good for the Aussie.
- There is also heightened risk appetite ahead of the (Federal Reserve’s policy body the) FOMC meeting on Thursday. Markets expect the FOMC will announce the introduction of more quantitative easing (QE3).
- The German court ruling on the constitutional validity of Berlin’s participation in a permanent bailout fund for Europe will also be of interest. People are hoping that it will be a positive decision on the ESM (European Stability Mechanism) bailout fund.
1.21pm: A 'dirty tricks' campaign has broken out between Woolworths and its arch-rival in the hardware sector, Bunnings, over the style and format of Woolworths new hardware chain, Masters.
Woolworths issued a statement today saying that a critical report was being circulated to brokers and the media by an organisation called Madison Cross, a management consultancy associated with Bunnings. Bunnings is owned by Wesfarmers, which also owns Coles, Target and Kmart.
The Madison Cross report is believed to criticise Masters over its 'female friendly' format which it claims is turning away traditional tradesmen. Woolworths said it will refer the report to the competition regulator.
1.14pm: By hiking royalties on coal, the Queensland government may do more to stop global warming in one fell swoop, than the federal government plans to do with its carbon tax, renewable energy target and the rest of the Clean Energy Future package combined, Paddy Manning writes.
The royalties increase, unveiled by the state government yesterday, will cost Queensland coal miners in excess of ten times more per tonne than the carbon tax. More to the point, the tax grab covers coal exports, something which the carbon tax doesn't.
With the coal industry already shelving planned new projects, yesterday's decision may prompt miners to place more ventures on hold.
The royalty increase, therefore, could delay or prevent millions and millions of tonnes of carbon dioxide - a key greenhouse gas - being emitted both here and overseas where the coal would be burned.
1.10pm: Later tonight, Germany's Constitutional Court is expected to approve the European Stability Mechanism - the eurozone's new bailout fund - but legal experts believe it will impose tough conditions limiting German flexibility on future rescues.
A favourable court decision would show European sovereign debt and banking issues "are being addressed in a more robust form and obviously would be positive for banks there and banks here," says Peter Warnes, head of equities at Morningstar, adding that it will signal "the market is freeing up a bit."
12.48pm: BusinessDay columnist Mal Maiden chats about Twiggy Forrest and the rise in iron ore prices.
Please turn off the auto-refresh at the top of the page if you intend to watch this video.
12.35pm: An interesting read from Jeremy Warner: Is time running out for the lucky country?
Despite massive raw material exports, Australians live well beyond their means.
All this makes news of fresh job losses and mine closures at Xstrata and BHP Billiton of more than just passing interest. Just as Glencore's Ivan Glasenberg goes for broke by increasing his takeover bid for Xstrata, many mining finance houses seem to be signalling the top of the cycle by cutting back on production and deferring tens of billions worth of investment.
Is this just a temporary setback, or should Australia and other big producers be preparing for the end of the current ''super-cycle''?
One of those who takes the latter view is Harry Colvin of Longview Economics. Indeed, he suggests that deflation of the iron ore price bubble will probably trigger the end of Australia's mining boom, and with it, perhaps, the Aussie dollar's new-found status as the Swiss franc of the southern hemisphere.
12.26pm: Here's a snap shot of how the major markets around the region are performing, all up:
- Nikkei(Japan): +1.29%
- Shanghai: +0.34%
- Taiwan: +0.91%
- South Korea: +1.18%
- Singapore: +0.42%
- New Zealand: +0.87
12.20pm: Concerns over the Australian Energy Regulator’s tougher stance spilled over to other regulated utilities, with Spark Infrastructure losing 1.3c to $1.627 as Envestra shed 0.5c to 88c with Duet also off 0.5c at $2.12.5c.
Duet has enjoyed an extended rally from the $1.90 level on recent news that it plans to internalise its management, which will eventually give earnings a fillip.
12.15pm: The Australian government has sold $500 million of March 15, 2019 Treasury bonds.
The Australian Office of Financial Management (AOFM), which conducts bond auctions on behalf of the government, said the bonds were sold for a weighted average yield of 2.7912 per cent.
The sale attracted bids totalling $2.310 billion, giving a coverage ratio of 4.62.
12.08pm: Property developer Mirvac Group’s new chief executive Susan Lloyd-Hurwitz will start work in the top job in early November.
Mirvac said Ms Lloyd-Hurwitz, who is currently the London-based managing director for the European arm of LaSalle Investment, would join the company on November 5.
Her appointment was announced in mid-August following the surprise resignation of Nick Collishaw.Mr Collishaw will leave Mirvac on October 31.
Mirvac is currently trading up 1.3 cents, or 0.88 per cent, at $1.43.
11.59am: The dollar is at a new high for the day, hitting $US1.0452 after the ABS released figures showing a 4.6 per cent rise in dwelling unit starts for the second quarter.
11.50am: Rating agency Moody's said it sees no immediate threat to Australia's triple A rating from tumbling commodity prices that have prompted some miners to scrap planned investments and cut output.
Prices for iron ore and coal, Australia's two largest exports, have fallen sharply in recent weeks, raising concerns about the impact on Australia's terms of trade and tax revenues if the slump is prolonged.
"We are very comfortable with Australia's triple A ratings because of the government's very low debt levels compared with other sovereigns in the triple A category," said Steven Hess, a senior vice president at Moody's.
11.42am: Gina Rinehart’s youngest daughter has been refused leave to seek to have her family’s multimillion-dollar trust fund battle dealt with through mediation.
The bitter battle between Australia’s richest person and her three eldest children returned to the NSW Supreme Court on Wednesday.
John Hancock, Bianca Rinehart and Hope Welker launched the proceedings against their mining magnate mother a year ago in a bid to oust her as trustee of the family trust.
Francois Kunc, SC, representing Ginia Rinehart, sought leave to file a notice of motion in court to have the matter dealt with through mediation.
He referred to the disclosure of various documents to her older siblings as a reason to embark on mediation.‘‘The public debate about this issue is not, she perceives, in her family’s interest,’’ he said.
Justice Paul Brereton dismissed the application.
11.32am: Discount retailer The Reject Shop has finalised a $27.4 million insurance claim for flood damage to its distribution centre in Queensland. The centre was damaged during the floods that hit Queensland in early 2011.
The company on Wednesday said its overall claims settlement of $27.4 million was $2.9 million higher than the amount it recorded for its 2011/12 financial year.
It says it expects to receive a final insurance payout of $7.6 million on Wednesday, and will recognise it in its 2012/13 accounts.
11.19am: The prospect of a tougher stance adopted by the Australian Energy Regulator towards the spending plans of both SP Ausnet and APA in the Victorian gas market has seen both share prices sold off today.
Late yesterday, the AER said it would cut spending plans of the two companies in a draft determination for the 2013-2017 period.
BusinessDay's Brian Robins reports that Victorian households receiving gas from SP Ausnet could save as much as $9 a year on average from lower gas charges, while the savings would be around $4 for the high pressure gas network operated by APA.
The regulator cut by 21 per cent to $928 million from $1.18 billion the proposed outlays on SP Ausnet’s Victorian gas distribution network between 2013 and 2017. As a result, the proposed tariff, too, will be cut by as much as 23 per cent from what SP Ausnet wanted.
11.10am: Here are the early sliders on the ASX200:
- SP Ausnet: -2.73%
- Southern Cross Media: -2.68%
- Pacific Brands: -2.52%
- Emeco Holdings: -2.13%
- APA Group: -2.07%
- Tabcorp: -1.7%
- Whitehaven: -1.67%
10.55am: Some of the big retailers are also having a positive day, but Wesfarmers is lagging:
- Woolworths: +0.03%
- Wesfarmers: -1.03%
- Harvey Norman: +1.52%
- David Jones: +1.27%
- Westfield: +0.8%
- Myer: +0.54%
10.50am: The big banks are trading in line with the broader market, give or take:
- CBA is 1.18% higher to $54.82
- ANZ is 0.46% higher to $24.21
- NAB is 0.8% higher to $25.28
- Westpac is 0.85% higher to $23.78
10.45am: That little hesitation about 20 minutes ago in the rise of the ASX200 was indeed little. The benchark index has now risen to a gain of 0.6 per cent and the miners, particularly the big iron ore plays, are driving it.
Shares in iron ore miner Fortescue have jumped nearly five per cent this morning, as the price of the commodity rallied on expectations of further stimulus in China.
As we noted earlier, stock in the Perth-based miner rose as much as 4.75 per cent, or 16 cents, to $3.53 at open, after iron ore climbed over $US100 per tonne, to $US100.20 yesterday, rising $US5.20 in a single session. The key commodity export has risen 14.8 per cent in four consecutive sessions, as investors piled back into the raw material, after Chinese authorities have confirmed that 1 trillion yuan ($151 billion) stimulus projects were under way.
The rise in iron ore had halted a plunge to an October 2009-lows of $US86.70 last week on concerns China’s growth was stalling too rapidly.
10.40am: Today's first piece of economics new is out and it shows that consumer confidence rose in September as optimism grew on personal finances and the economic outlook, an encouraging result given the recent torrent of gloomy media coverage about a possible end the to mining boom.
The poll of 1200 people by Westpac Bank and the Melbourne Institute showed its index of consumer sentiment rose 1.6 per cent in September to 98.2, recouping some of August's fall. The index was up 1.3 per cent on September last year.
The survey was taken between Sept. 3 to 8 when the local media was full of reports of miners cutting production and jobs in the face of falling commodity prices and rising costs.
10.31am: The big miners are also benefitting from the revival of the China iron ore price:
- BHP is 0.24% higher to $32.82
- Rio is 1.28% higher to $55.23
- Fortescue is 3.26% higher to $3.48
10.24am: Markets have added 0.3 per cent before taking a breather. Futures, and the buoyant dollar, suggested an early gain of 0.5 per cent. Here are the companies on the materials sub index which are enjoying a strong start to the day:
- Discovery Metals: +4.98%
- Medusa Mining: +3.67%
- Iluka Resources: +3.42%
- Sundance Resources: +3.33%
- Lynas: +3.09%
- Atlas Iron: +3.07%
10.22am: As you might expect with the iron ore price rising, the materials sub index on the ASX200 is leading the market higher:
- Materials: +0.9%
- Financials: +0.43%
- Telecoms: +0.4%
- Industrials: +0.24%
- Consumer staples: -0.45%
- Utilities: -0.41%
- Info tech: -0.37%
10.16am: Another potential prop for Origin’s share price has been kicked away from underneath it, with news overnight that an offshore exploration well it has a stake off east Africa, is to be plugged and abandoned.
Earlier, there was considerable optimism for the prospects of a significant find at the Mbawa-1 well drilled offshore Kenya in east Africa, amid heightened optimism for the future of export gas projects in the region.
Origin has a 20 per cent interest in the well, which encountered 52 metres of gas in the main target zone, but no significant hydrocarbons, even after the depth of the hole was deepened.
Shares in Pancontinental Oil & Gas, which was also involved, have fallen 55 per cent in early trade, wiping $150 million from the value of the company. Origin shares are 0.1 per cent lower to $11.75.
10.12am: The benchmark S&P/ASX200 index is up 8.2 points, or 0.19 per cent, at 4334.0, while the broader All Ordinaries index is up 9.1 points, or 0.21 per cent, at 4357.4.
On the ASX 24, the September share price index futures contract was up 10 points at 4334, with 8251 contracts traded.
10.10am: Fortescue shares are strongly higher early - up 4.8 per cent to $3.53 as the iron ore price recovers.
10.07am: Early take - as markets open, shares have moved higher but not strongly. Up about 0.2 per cent.
9.54am: Australian bond futures prices are lower, ahead of a key court ruling on Germany’s participation in the euro zone bailout fund, and a policy meeting of the US central bank.
At 8.30am, the September 10-year bond futures contract was trading at 96.930 (implying a yield of 3.070 per cent), down from 96.970 (3.030 per cent) at Tuesday’s close. The September three-year bond futures contract was at 97.465 (2.535 per cent), down from 97.530 (2.470 per cent).
NAB interest rate strategist Skye Masters said that bonds had sold off in anticipation of a Federal Open Market Committee (FOMC) meeting, and a German court ruling on Berlin’s participation in the permanent bailout fund for the euro zone.
9.51am: Some analyst rating changes for today:
- Woodside cut to 'neutral' at Macquarie
- Southern Cross Media cut to 'underweight' at JPMorgan
- European Mining raised to 'overweight' at UBS
- Toll Holdings cut to 'underweight' from 'neutral' at JPMorgan
- Calibre rated new 'buy' at Goldman
9.48am: The Aussie dollar has jumped more than one US cent overnight after a record two-day advance for Chinese iron ore prices and expectations of further stimulus from the US central bank.
The dollar rose as high as $US1.045, a three-week high against the greenback, before easing back to $US1.043 in recent trading. It was trading at $US1.033 in late local trading yesterday before it began its climb. The Aussie dollar was also buying 81.1 yen, 81.1 euro cents and 64.9 pence in recent trading.
9.43am: The China iron ore price rose again overnight, climbing back above $US100 for the first time since 22 August. It added $US5.20 to $US100.20 as the Chinese premier signalled there's more room for fiscal and monetary policy to support growth. BHP and Rio both added 2 per cent in US trade. Iron ore has risen from $US86.70 on 5 September, adding 14.8 per cent in just four trading days.
9.36am: For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:
- The SPI was 18 points higher at 4342
- The $A was trading at $US1.0434
- In the US, the S&P500 lost 0.36% to 1434.19
- In Europe, the FTSE100 lost 0.02% to 5792.19
- China iron ore price added $US5.20 to $US100.20
- Gold added 0.4% to $US1731.60 an ounce
- WTI crude oil added 63 US cents to $US97.17 a barrel
- RJ/CRB commodities index 0.53% to 314.90
9.34am: Hi folks. Welcome to the Markets Live blog for Wednesday.
This blog is not intended as investment advice
BusinessDay with agencies