World Market Overview 05/12/2011
The Australian share market closed higher on Wednesday as Chinese inflation figures boosted the resources sector. At the close, the benchmark S&P/ASX200 index had gained 54.4 points, or 1.15 per cent, at 4,780.2 points, while the broader All Ordinaries index had lifted 54.6 points, or 1.14 per cent, to 4,858.2 points.
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On the ASX 24, the June share price index futures contract was 61 points higher at 4780 points, with 33,050 contracts traded, according to preliminary calculations. The resources sector had benefited from higher prices for base metals overnight, but markets in the Asia Pacific region on Wednesday had also been driven by Chinese inflation data. China said its consumer price index rose 5.3 per cent year on year in April, down from 5.4 per cent in March. The inflation figure was slightly higher than the forecast of 5.2 per cent. In the resources sector on the local bourse, global miner BHP Billiton jumped 77 cents to $45.30, while Rio Tinto advanced $1.80 to $81.45.
In the banking sector, Commonwealth Bank found 32 cents at $52.52 after it posted third-quarter unaudited cash earnings of around $1.7 billion amid "subdued" credit demand and fragile consumer and business confidence. Building materials company CSR picked up five cents at $2.95 after it posted an annual net profit of $503.4 million, following a $111.7 million loss in the prior year.
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Building materials supplier Boral rose 26 cents to $4.91 after it said full year net profit would be in the range of $160 million to $175 million, despite soft residential markets and bad weather earlier in the year. Property developer Westfield Group slipped two cents to $9.05 after confirming forecasts for annual earnings, distributions and operating income, and increased expected development starts over the next two years.
Retailer David Jones was up 11 cents at $4.56 after it reported a fall in sales in its third quarter, but reaffirmed annual profit guidance. Melbourne-based department store Myer Holdings nudged up one cent to $3.18 after it said total sales in the third quarter fell two per cent but reaffirmed its expectation that annual profit will rise five per cent. Casino operator Crown was 12 cents higher at $8.57 after it said it would spend $281 million to acquire new properties and to upgrade flagship properties in Melbourne and Perth. Preliminary national turnover was 2.37 billion shares worth $6.12 billion, with 620 stocks up, 468 down and 400 unchanged. On Wall Street overnight, the Dow Jones Industrial Average index rose 75.68 points, or 0.60 per cent, to 12,760.36 points.
The Australian dollar gained on the back of rising stocks and commodities markets Wednesday, even as a report of strong inflation in China stunted some of the late day uptrend. After concerns about global growth and its impact on commodity markets had weighed on oil and metals last week, traders have pushed back into those products and commodity linked currencies like the Australian dollar this week.
Among the only things that could dent the positive sentiment about Australia's booming resources sector are any concerns about China. Some of those concerns were realized on Wednesday as inflation data in China suggested further tightening measures in Beijing would be needed. The Australian dollar, after rallying sharply overnight and for much of the early Asia session, halted its gains to trade flat for the rest of the session. The Australian dollar was changing hands at $1.0860, up from $1.0747 late Tuesday. Against the yen, it was at 87.885, from 86.505.
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