The Australian share market closed firmly in the black on last Friday, driven by a resurgent resources sector after the commodities index posted its biggest weekly gain in 33 years. US stocks rose on Friday as financial stocks gained and a plunge in oil prices soothed worries about inflation and consumer spending.
The Australian dollar opened more than one US cent weaker today as Russia's withdrawal from Georgia eased crude oil supply concerns, boosting the US currency. The commodities-driven dollar fell during the weekend as the New York price of crude oil fell by 5.44 per cent, or $US6.59, to $US114.59 a barrel.
The Australian stock market has opened higher today. The benchmark S&P/ASX200 index was up as much as 77 points, or 1.6%, to 5008.4 in early trading.
At 7.07am on the Sydney Futures Exchange, the September share price index futures contract was up 73 points at 4969.
Key Economic Facts and Figures
The Federal Government has rejected claims that plans by a number of major companies to axe hundreds of jobs in the coming months is evidence the economy has slowed too much. Boeing and Ford plan to axe more than 800 jobs in total. It is said that the overall employment figures are still very robust and in a good shape.
Bernie Lewis Home Loans said refinancing loans rose to 22.1 per cent of total loans in 2007-08, up from 17.6 per cent the previous year, as homeowners seek a better deal on their mortgage. Expectations of an upcoming official interest rate cut have been improving the popularity of variable loans.
The Reserve Bank is widely tipped to cut the official cash rate from 7.25per cent when it meets next Tuesday. Finance Minister Lindsay Tanner said yesterday that the May budget's $22billion surplus put "downward pressure on inflation and interest rates".
The Federal Government has approved plans by Chinalco (SHA:60160 0)(HKG:2600) to acquire as much as 11 per cent of miner and takeover target Rio Tinto (ASX:RIO). The move effectively clears the way for the Aluminium Corporation of China (Chinalco) to block BHP Billiton's (ASX:BHP) A$143 billion all-scrip bid to win control of Rio's global operations.
Macquarie Group Ltd. (ASX:MQG) and U.S. private-equity firm TPG are among six shortlisted bidders for a 45% stake in PCCW Ltd.'s (HKG:0008) new media and telecommunications unit, people familiar with the matter said Friday.
Wuhan Iron and Steel Group (SHA:600005), the third-largest steel company on the mainland, has expressed interest in the proposed sale of iron ore assets by Australia's Aquila Resources (ASX:AQA). The company signed a confidentiality agreement late last month that gave it access to Aquila's financial data.
Important Corporate News
Challenger Financial Services (ASX:CGF) says its chief executive and managing director Mike Tilley will step down on August 31, after the company reported a bottom line annual net loss. Mike Tilley will be replaced by Dominic Stevens, who joined Challenger Financial in 2003.
Property manager and caterer Spotless Group (ASX:SPT) is confident of continued profit growth this year after delivering a drop in earnings for 2007/08. Profit during the 12 months to June 30 fell 45 per cent on the corresponding period in 2006/07 to A$26 million after one-off items including, costs associated with an organisational restructure.
Transfield Services Ltd (ASX:TSE), a provider of maintenance services to miners, says its net profit will grow by up to 20 per cent this year, after reporting a fall in annual earnings. Profit during the 12 months to June 30 fell 25.6 per cent to A$82.17 million from the previous year due to a strong Australian dollar, rising input cos ts and the deferral of work. Transfield said the outlook for this financial year was "positive" and that it expected net profit to grow in a range of 10 to 20 per cent.
Goodman Fielder (ASX:GFF) has reported a fall in annual profit and says it doesn't expect much improvement in earnings this financial year due to uncertainty surrounding the outlook for the economies of Australia and New Zealand. Net profit for the year ended June 30 fell 88.4 per cent to A$27.7 million from the prior corresponding period.
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