Sydney, Aug 15, 2008 (ABN Newswire) - US stocks have closed higher as investors showed a fresh appetite for battered financial stocks and as retail giant Wal-Mart announced a big jump in quarterly profits.

Yesterday the Australian share market closed in the black yesterday after stronger commodity prices bolstered resource stocks and countered a negative lead from Wall Street, although gains were capped by weakness in the banking sector towards the end of trade.

Oil prices fell about $US1 on Thursday, pulling back from the previous day's rally. Crude fell as low as $US112.59 a barrel as traders continued to ponder Wednesday's US Energy Department report on weekly fuel inventories.

The benchmark S&P/ASX200 index was up 29.5 points, or 0.6 per cent, at 4,981.1, while the broader All Ordinaries index lifted 43.1 points, or 0.86 per cent, to 5,039.

The Australian dollar opened marginally weaker today as the fastest annual US inflation growth data in 17 years boosted the US unit. At 7am, the Australian dollar was trading at $US0.8717/22, down from yesterday's close of 0.8720/23.

At 0745 AEST, the Sydney Futures Exchange's September share price index futures contract was up 20 points at 4,949.

Key Economic Facts and Figures

The central bank has given its loudest signal yet that it is about to cut interest rates, as data shows wage inflation remains under control. Some economists predict the RBA will cut rates by 0.25 of a percentage point when it meets on September 2. However others believe homeowners may have to wait until November.

The Melbourne Institute Consumer Inflationary Expectations Report said cheaper petrol in recent weeks has allowed inflationary expectations to fall back from the highest levels in 15 years. Median inflationary expectations dropped to 4.9 per cent in August, the MI's survey of 1200 respondents found.

According to The Financial Services Institute of Australasia (Finsia), Australians have been binging on debt for the past 10 years and a growing number of home owners are experiencing financial stress. But income earning and wealth accumulation has shifted significantly from younger to older Australians.

The consumer price index rose by 4.5 per cent over the year to June, according to Australian Bureau of Statistics (ABS) data yesterday. ABS data shows the commodities boom continues to line the pockets of Australia's wealthiest workers, with mining workers' pay jumping 10 per cent over the past year.

Data releases today include the Housing Industry Association/Commonwealth Bank housing affordability report for the June quarter.

M&A News

QBE(ASX:QBE) revealed last night it is buying the local and Asian operations of a global mortgage insurer. QBE Insurance has agreed to purchase PMI(NYSE:PMI). QBE will pay PMI 80 percent in cash, with the remainder comprising a promissory note payable in three years. The deal, which has been valued at A$1.03 billion, will give QBE a 40 percent share of the Australian residential mortgage insurance market.

Oilex(ASX:OEX) has entered into an agreement to acquire an additional 15% working interest in the West Kampar PSC (Production Sharing Contract onshore Sumatra, Indonesia) from PT Sumatera Persada Energi, thereby increasing Oilex's working interest from 45 to 60pc.

Important Corporate News

Contracting and services group Macmahon Holdings Ltd(ASX:MAH) has won a A$78 million design and construct contract to extend the Reid Highway in Perth. The contract is for 2.6 km of four-lane dual carriageway running between the Great Northern Highway and West Swan Road, including a 220-metre bridge and several smaller bridges. Work is scheduled to be complete by early 2010.

Nick Scali Ltd(ASX:NCK) reported a net profit of A$6.6 million for the year to June 30 2008, down 23.9 per cent compared with FY07's A$8.66m. Revenue was up 2.1pc to A$78.84m.

Leighton Holdings Ltd(ASX:LEI) has forecast net profit to grow by at least 15 per cent this year as Australia's biggest construction firm continues to benefit from spending on infrastructure and resource development. The company's net profit for the 12 months to June rose 35 per cent to A$607.9 million from A$450 million the year before, Sydney-based Leighton said in a statement yesterday.