Markets Live: Shares post modest gains
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Markets Live: Shares post modest gains

Australian shares have edge higher, led by CBA while big miners are mainly softer as copper prices slipped.

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That's all for today. Thanks everyone for following the blog and we hope to welcome you back tomorrow, from 9.30am.

Here's the wrap of today's session.

The dollar has shaken off weak economic data again, with the Aussie rising to $US1.0560, from $US1.0535 early, and near Friday's four-month peak of $US1.0598. It also hit a four-year peak of 94.54 yen.

The Aussie has shown a remarkable resilience to a flow of weak domestic data including a fall in housing finance and another slide in job ads. Last week, figures showed soft retail sales and a widening trade deficit.

Supporting the local currency is ongoing strength in commodity prices and an improving Chinese economy.

The Aussie fared worse against the euro, which soared to $1.2709, the highest since January 2 and around four cents above Thursday's trough.

The single currency has been on a tear since European Central Bank chief Mario Draghi last week gave no indication the bank would ease monetary policy any further.

Meanwhile, Chinese sharemarkets are going through the roof, after the head of the financial regulator flagged that the amount foreigners can invest in Chinese securities may be increased:

  • Shanghai Composite: +2.6%
  • Shenzhen Comnposite: +3.1%
  • CSI300: +3.2%

Guo Shuqing, Chairman of China Securities Regulatory Commission, said China can raise 10 times the level of quotas for the so-called QFII and RQFII programs, according to Bloomberg.

‘‘Guo’s comments are very significant as it shows the government is trying to get bullish on stocks and it’s a policy signal as well,’’ said Hao Hong, Hong Kong-based managing director of research at Bank of Communications Co.

Regulators have since 2003 approved a combined QFII quota of $US36.04 billion as of November 30 under the program which allows foreign investors to buy yuan-denominated securities. The government scrapped a ceiling on investments by overseas sovereign wealth funds and central banks in its capital markets last month, part of government efforts to encourage long-term foreign ownership and shore up slumping equities.

China has started preparations for a trial program that would allow individuals to invest in overseas capital markets as the nation seeks a greater role for its currency in global finance.

Oil and gas producer Woodside Petroleum has shut the Vincent oilfield offshore Western Australia for scheduled maintenance that which will run for five months, trade sources have told Reuters.

The field's floating production and storage offloading (FPSO) Ngujima-Yin will be heading to a shipyard in Singapore very soon, one source said.

Oil production at the Vincent field, located about 50 km north-west of Exmouth, in Western Australia, was about 46,000 barrels per day (bpd) at the end of the second quarter last year, Woodside said on its website.

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Virgin Australia has experienced minor teething problems on its first day of a new booking and reservations system but the airline insists the transition has been relatively smooth.

The airline’s head of corporate affairs, Danielle Keighery, said there had been some delays of up to 40 minutes at Sydney Airport but on a network-wide basis the switch to Sabre’s global distribution system had ‘‘gone reasonably well’’.

‘‘Even this morning during peak hours the queues were not particularly long ... when you consider this is the first time [the system has been operated] in a live environment,’’ she said. ‘‘Whilst we have had some delays across the network, they have been minimal. We haven’t had to cancel flights.’’

"Overall there seems to be a fairly solid level of confidence as we move through January that the recent gains in our market can be sustained," says Mike Kendall, executive director of JBWere.

"That’s giving investors confidence as they see deposit rates continue to deteriorate to maybe put a little bit more money back into the equity market.

"That certainly underpinned the recent rise and is holding things at the moment, there doesn’t appear to be an about face."

Materials ended 0.1 per cent higher, financials and energy bot added 0.3 per cent, while IT was the only sector to post a loss, slipping 0.2 per cent.

The sharemarket has closed higher, with small gains in most sectors. The benchmark S&P/ASX200 index added 10.2 points, or 0.2 per cent, to 4719.7, while the broader All Ords gained 11.9 points, or 0.3 per cent, to 4745.7.

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India-owned Sembawang Australia has given Macmahon until tomorrow to accept its $25 million takeover offer that rivals an agreement with Leighton.

Macmahon is looking to become a dedicated full service mining contractor, and in December struck a $20 million deal with its biggest shareholder Leighton to sell its construction projects, including equipment and staff, with the exception of some assets and its rail business.

But Sembawang has since made a two-part rival offer to the Leighton agreement. The first offer - to buy all of Macmahon’s construction businesses - lapsed over the weekend. But the second offer - to replicate the deal with Leighton but for an additional $5 million - remains in play.

Speculation of higher iron ore prices pushing the budget into surplus is heating up.

Achieving a 2012-13 budget surplus is "certainly possible", after forecasters from Deutsche Bank forecast the price would climb to almost double the September mark within weeks, says Labor backbencher Andrew Leigh, a former economist.

Treasurer Wayne Swan said last month a surplus was unlikely - but that was before iron ore prices took off, to around $US155 a tonne.

A spokesman for acting treasurer Penny Wong appeared to agree.

"People should be cautious about putting all their faith in numbers that are based on a day's, week's or month's spot prices for our resources," the spokesman said.

"It's no secret that our budget revenues have already taken a big hit from the impact of continued global instability, commodity price volatility and a high dollar."

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