After a quiet night on the overseas markets the Australian
market opened a few points higher and has extended its rally
throughout the morning. The U.S. markets were held back by weaker
than expected home price data, a fall in consumer confidence for
March and profit taking after Monday's big rally. Yesterday on
the Australian Stock Exchange (
) key banks, health care as well as food and beverage retail
stocks moved higher. Today most sectors are holding on to gains
into the afternoon session. At lunchtime, The All Ordinaries
Index (XAO) is up by 22pts or 0.5pct to 4,413.
At 11.30 am, The RBA released its half-yearly Financial
Stability Review, its assessment on bank the system in Australia
to the end of 2011. This result was very positive and helped
boost the markets. The RBA said ´´larger banks are in a better
position than they were a few years ago to cope with the tighter
funding conditions and overseas dramas", and that company balance
sheets have improved. Although there is still some concerns over
the management of European debt that will be in focus into at
least the middle of this year.
The S&P/ASX 200 Financials sector is outperforming the
rest of the market, National Australia Bank's (NAB) share price
is up 0.4pct to $24.76 and Australia and New Zealand Banking
Group Limited (ANZ) also up 1.12 pct to $23.45 while Macquarie
Group (MQG) is up 1.46 pct to $29.98 and QBE Insurance Group
Limited (QBE) holding on to a 1.22 pct gain at $14.12.
The positive toned is boosting retail stocks with S&P/ASX
200 Consumer Staples sector up 0.9 pct. David Jones Limited (DJS)
is up 1.7 pct to $2.39 and Woolworths Limited (WOW) and
Wesfarmers Limited (
) both up around 1 pct. More merger and takeover activity in the
world grain handling and producing markets has helped GrainCorp
) add 2 pct to $8.96, while Treasury Wine Estates Limited (TWE)
rebounding now up 0.73 pct to $4.15 after its 2 pct slide
S&P/ASX 200 Materials sector is up 0.6pct. The country's
second largest miner, Rio Tinto Limited, (
) is up 0.6pct to $64.49 after announcing plans to sell its
diamond assets. Rival BHP Billiton Limited (
) adding 0.35pct to $34.54, while our largest listed gold miner
Newcrest Mining Limited (NCM) also higher up 1.6 pct to
Yesterday Leighton Holdings (LEI) was placed in a trading halt
and this holt has been extended today, last traded at $23.75, as
the construction company considers potential changes to its
financial guidance. Leighton said the findings of the current
quarterly review could prompt a revision of its earnings
guidance. Major shareholder Hoctief Limited (HOT.GR) fell over 5
pct on the German Exchange overnight.
Elsewhere, News Corp (NWS) is up 0.8 pct to $19.55, and
Telstra (TLS) is up 0.7 pct to $3.25.
The Aussie dollar lost ground overnight and is continuing to
slide in early trade today. At 1pm AEDT the Aussie is buying
US104.24c and €78.26c.
CommSec Market Analyst
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