The local share market soared today as news the Australian Stock Exchange plans to merge with the Singapore Exchange boosted investor sentiment. The All Ordinaries Index (XAO) rose 61pts or 1.3pct to 4780.6 while the S&P/ASX 200 Index (XJO) was firmer by 61.8pts or 1.3pct to 4710.

Shares in the ASX (ASX) rose 19.4pct to $41.75 as the company entered into an agreement to merge with the Singapore Stock Exchange - SGX. The $8.4 billion dollar plan will see SGX buy all ASX shares, paying $22 cash and 3.5 SGX shares. It values the ASX at $48 per share. The deal still requires approval from Treasurer Wayne Swan, the Australian Securities and Investments Commission and the Monetary Authority of Singapore.

Companies which are likely to work on or benefit from the deal also soared. Computershare (CPU) added 4.2pct to $10.27 while Macquarie Group (MQG) was up 4.1pct to $34.97.

Other financial stocks were also strong, ahead of expected strong results when the big banks release earnings release results later this week. Shares in the NAB (NAB) rose 2.2pct to $25.01 while the ANZ (ANZ) was up 2.1pct to $23.90 and Westpac (WBC) gained 2.3pct to $22.95. Shares in the Commonwealth Bank (CBA) rose 0.9pct to $50.95 ahead of the lender's AGM tomorrow.

Mining stocks also performed well today. Rio Tinto (RIO) was up 2.5pct to $84.10 while BHP Billiton (BHP) firmed by 0.3pct to $41.74. Fortescue Metals Group (FMG) climbed 2.5pct to $6.55 while gold miner Newcrest Mining (NCM) added 1.6pct to $40.62.

Energy players performed well on the back of a firmer oil price. At 4pm AEDT the Nymex contract was higher at US$82.49 a barrel. Shares in Santos (STO) rose 2.6pct to $12.82 while Woodside Petroleum (WPL) firmed by 1pct to $43.94. Oilsearch (OSH) added 2pct to $6.52 and Caltex (CTX) was up 2.6pct to $12.31.

Telstra (TLS) shares firmed by 0.4pct to $2.64.

There was once again interest in the Ten Network (TEN) which rose a further 2.8pct to $1.63.

MAP Group (MAP), the owner of Sydney Airport, rose 2.7pct to $3.10. Sydney Airport today announced its current CEO would leave the company in early 2011, with Russell Balding deciding to pursue other opportunities.

Shares in fund manager Perpetual (PPT) rose 0.6pct to $37.90 after declaring a takeover offer from private equity firm KKR inadequate.

Economic data released today revealed the broad measure of business inflation, the producer price index (PPI), rose by 1.3pct in the September quarter, well ahead of expectations for an increase of 0.5pct. Compared with a year ago, producer prices were up by 2.2pct. Inflation was narrowly based, and largely driven by price increases for utilities (electricity, gas, water) and building costs. Excluding utilities and building costs, prices rose just 0.4pct in the September quarter. According to the Australian Institute of Petroleum the national average retail pump price rose 0.3 cents a litre last week to 123.9 cents a litre - a two month high. Over the next fortnight CommSec expects pump prices to trend sideways as the strengthening Australian dollar largely negates any increase in regional oil prices.

The Australian dollar ended the day firmer against all the major currencies. At 4pm AEDT it was worth US99.31c and €70.77c. It also reached a fresh 25 year high against the pound of £63.01c.

On the market overall, a total of 2.82 billion shares were traded, worth $5.4 billion. 742 were up, 417 were down and 348 were unchanged.

At 4.15pm AEDT on the Sydney Futures Exchange, the Share Price Index (SPI) futures contract was at 4721, up 72pts.

Ahead tonight, existing home sales data is released in the US.