Sydney, Sept 19, 2007 (ABN Newswire) -
Australian shares are firmer this morning, with miners and financial firms such as Macquarie Bank rallying after a hefty interest rate cut in the U.S. eased worries about the outlook for the world's biggest economy.
The U.S. central bank cut interest rates by half a percentage point, more than many had expected, lifting hopes that turmoil in the housing and credit markets would not hurt the U.S economy and sparking a rally on Wall Street.
At Midday the S&P/ASX200 index has gained 137 points to 6,330 and on the futures market the SPI 200's up 129.
In economic news, the annualised growth rate of the Westpac-Melbourne Institute leading index of economic activity stood at 4.6 percent in July, a dip from 4.9 percent in June but still above its long-term trend of 4.2 percent. The results showed that Australia's economy should boast a solid performance over the next three to nine months though there were signs the pace of growth may have peaked.
The full report is available at the following video and audio links.
Video Link
http://abnnewswire.net/fnnlnk/3J0ZXHFJAudio Link
http://abnnewswire.net/lnk/O46K8520In company news this hour, infrastructure firm SP Ausnet is close to a deal with Singapore Power to buy some assets of energy firm Alinta for $4 billion. The Financial Review is reporting that SP Ausnet, which owns and operates electricity and gas transmission networks in Victoria state, will conduct a $3 billion rights issue to fund the purchase. Investment banks UBS AG and Morgan Stanley will underwrite the balance of $1 billion to fund the transaction. A spokeswoman from SP Ausnet said the company has not received a formal proposal from Singapore Power but that discussions are underway. SP Ausnet shares are 0.72% higher at $1.39.
Adelaide Bank has this morning again denied speculation that it had sought liquidity assistance from the Reserve Bank of Australia. The company said the reports are completely false and without foundation. The official statement from the company said "Adelaide Bank reiterates that it has a continued strong liquidity position". Adelaide Bank shares fell more than 7 percent on yesterday on rumours it sought funding help from the central bank. Adelaide Bank shares are 3.5% higher at $14.19.
Now let's have a look at warrants from Macquarie Bank. BHP Billiton shares have surged over 3 percent to a new record high, as investors bid the stock higher on fresh hopes that the US economy will shift up a gear following last night's rate cut. Warrant traders have used the jump in the stock to close out positions for sizeable profits, with trades in BHPWMG Dec07 $45.00 Call and BHPIMI Oct07 $34.00 Instalment the highlight.
The recently beleaguered banking sector has also been one of today's stand-out performers, with all of the majors up strongly. Warrant traders have been active closing out a number of positions for profits across all of the banks, whilst others believing that ANZ may have run too hard bought downside exposure through ANZVMS Oct07 $29.00 Put.
Turning now to market indices. The index posting the biggest gain by percentage points is the Materials index, up 451 points at 14,211. Shares in Fortesque Metals are up 7.13% to $41.02. Shares in Minara Resources and Perilya are also higher.
All the indexes were ahead at midday but the index posting the smallest gain by percentage points is the Staples, up 81 points to 8,274. ABB Grain shares are down 4.95% to $7.10. AWB and Graincorp shares have also lost ground.
In Tokyo, the Nikkei is 510 points ahead and in New Zealand the NZSX50 is up 67.
Gold is currently trading at $723.90 U.S an ounce and one Australian dollar's buying 85.10 U.S cents.
Source: Finance News Network © 2007
http://www.finnewsnetwork.com.auAbout Finance News Network
Finance News Network (FNN) has been producing up-to-date concise business and finance news tailored to traders and investors alike since 2002. FNN content reaches a diverse and constantly growing audience via online streaming video, Street Vision broadcasts and the Telstra 3G mobile phone network.
http://www.finnewsnetwork.com.au
