POLITICS & POLICY

Unconfirmed media reports on Thursday circulated that Vale, the world's second largest metals and mining company and global leader in iron ore production, is reportedly eyeing to buy into Australian iron ore resources to strategize its shipment schemes to the Asian market.

The Adani Group of India has allotted a $6 billion worth of funds for projected coal mine-related expenditures as it pushes through with its overseas expansion plans in Australia and Indonesia by 2015.

The Australian stock market is bound to benefit from the overnight gains posted by markets in the U.S. and Europe. The S&P 500 traded near 10-month highs and the Dow once again flirted within the 13,000 level.

U.S. stocks overcame early losses, as a new round of economic data supported the market and strong performance from individual stocks pulled up two of the major indexes.

The Australian sharemarket lost ground for the first time in five sessions today, with the All Ordinaries Index (XAO) down 0.1 pct or 4.6 pts to 4367.5. The energy sector performed strongly; however weakness from both the miners and big banks dragged the market slightly into the red.

China's loss may well be very much the U.S.' gain as American rare earths producer Molycorp, Inc. on Wednesday announced the sequential start-up of its $895-million worth new Project Phoenix rare earth manufacturing facility at its flagship Mountain Pass, California operation, ahead of an April 1 target schedule.

The raging battle in Syria claimed the lives of two international journalists covering the siege on Wednesday being staged by Syrian security forces on the city of Homs, where hundreds of civilians have reportedly been killed so far more than two weeks of military assault.

Just when it committed last year to lessen, if not totally eradicate, its dependency on coal to fuel its energy requirements via a sworn participation into the Kyoto Protocol, China's energy use, and parallel coal consumption usage, has risen by 7 percent over a year ago, based on preliminary calculations by the National Bureau of Statistics released on Wednesday.

China has outlined a five-year plan meant to fast-track the development of its domestic downstream industries that use rare earths, the Ministry of Industry and Information Technology said on Wednesday.

Amidst the existing threats to her government, Prime Minister Julia Gillard has assured South Australia that the Murray River will be protected even as the controversial Murray Darling Basin Plan is set to be finalised before the end of 2012.

Foreign Minister Kevin Rudd resigned from his post Wednesday night, leading to a leadership battle in the Australian Labor Party. Rudd, who was ousted as prime minister by Julia Gillard in 2010, said he has lost her confidence.

Bell FX Currency Outlook: The Australian dollar has had a relatively quiet trading session overnight, despite the political uncertainty created by Kevin Rudd's resignation as Foreign Minister late yesterday.

Further easing is seen in the local stock market on Thursday with investors taking to the sidelines with no significant progress made in the economic fronts of Europe and the U.S.

U.S. stocks pared their losses to trade a touch lower as investors took a cautious stance on the European economic outlook after the Dow's rise to the cusp of new highs.

The continuing rift within Australia's Labour Party has forced Kevin Rudd to rescind his post as the country's Foreign Minister stressing this is the most honourable thing to do amidst the political attacks marring his credibility.

The Australian sharemarket rose slightly today for the fourth consecutive day. Four straight sessions of gains is something the market has not accomplished since the end of November last year. The All Ordinaries Index (XAO) edged higher by 0.1 pct or 3.9 pts to 4372.1.

Same-sex marriage in Australia is inevitable, and this came from PM Julia Gillard, according to the couples who dined with her at the Lodge Tuesday night, and some of them carried personal discussions on the future of the legalization of their unions in Australia.

The Minerals Council of Australia is supporting the minerals resource rent tax. Mitch Hooke, chief of the council, told a Senate hearing in Canberra on Tuesday that the proposed 30 per cent tax on profits of large coal and iron producers is workable.

Distractions continue to haunt the federal government as the ruling Australian Labor Party struggles to address the nagging leadership speculations that threatens to end the barely two-year rule of Prime Minister Julia Gillard.

The Reserve Bank of Australia (RBA) has backed the claim of Australian lenders that funding costs sourced from overseas have risen.

The Gold Administration Bureau of China on Tuesday has announced that gold making in the country's Xinjiang Uygur autonomous region in 2011 jumped by 15.18 per cent to register a new record high of 12.1 tonnes compared from a year ago.

Lynas Corp., it what could be another blow to its business operating principles, has been categorically denied yet again support by the Australian government regarding its highly controversial waste material yet to be produced from its $200-million rare earths processing plant in Malaysia.

The annual consumer price index (CPI) of India has hit 7.65 per cent for January compared over a year ago, hinting efforts to moderate prices are working. Albeit higher than wholesale price index (WPI), the latest CPI likewise suggests a rate cut by the central bank might not occur sometime soon.

Taiwan's largest steel producer, China Steel Corp, on Tuesday announced it is poised to dispense some $110 million or AU$102 million to buy the share of output rights at the MDL 162 coal mine site in the northern state of Queensland, Australia.

Market consolidation and some profit-taking will hit the Australian stock markets on Wednesday as investors have shifted their wariness to the lingering tension with Iran and the rest of the members of the United Nations.

Bell FX Currency Outlook: The Australian Dollar is weaker this morning as concerns remain Greece will require more financial assistance despite the approval of a second bailout package.

The Dow Jones Industrial Average pierced the 13000 level for the first time since before the financial crisis, but traded largely below the mark during a choppy session in which stocks were negative at times. The Dow broke 13,000 before noon Tuesday and a handful of other times throughout the day, but was down 17 points, or 0.1%, at 12933 in afternoon trading.

The Australian sharemarket rose for the third consecutive session today, with the All Ordinaries Index (XAO) gaining 0.8 pct or 35.4 pts to 4368.2. This has been the best start to a new week since early January 2012. All sectors recorded healthy gains by market close with energy, mining and industrial stocks the standouts.

Spot gold grew on Tuesday, albeit marginally, in what could be seen as a festive carry over from Monday's positive improvements in the eurozone and China's easing of the reserve requirements ratio for itsbanks.