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Sydney, Jan 7, 2009 AEST (ABN Newswire) - US stocks rose modestly overnight, lifted by gains overseas, and as investors hoped that emergency Government measures will pull the global economy out of recession.

Yesterday the Australian share market closed higher with gains across all sectors, except for healthcare. The market remained quiet with low trading volume and less news out. The S&P/ASX200 index rose 55.7 points, or 1.5%, to 3742.7, a near two-month closing high, while the broader All Ordinaries index gained 50.3 points, or 1.4%, to 3689.2.

On the Sydney Futures Exchange, the March share price index contract was 39 points higher at 3720 on a volume of 18,589 contracts.

The Australian dollar has opened at a three-month high as firmer commodities prices and improved sentiment on Wall Street boosted the high-yielding currency. At 0700 AEDT, the Australian dollar was trading at $US0.7249/53, up 1.87 per cent from Tuesday's close of $US0.7115/20.

Oil prices have given up early gains as fresh signs of a deepening US recession trumped tensions in the Middle East and worries over natural gas shortages in Europe. Light, sweet crude for February delivery fell 23 cents to $US48.58 a barrel in trading on the New York Mercantile Exchange.

Key Economic Facts and Figures

Federal Chamber of Automotive Industries said sales of new vehicles in Australia fell 11.3 percent in December, with full-year sales down 3.6 percent, and warned that further difficult times are ahead. The chamber also forecasts 880,000 new cars will be sold this year, a drop of 13 per cent. Ford Australia predicts 850,000.

The Australian Chamber of Commerce and Industry survey shows that business confidence is at a 10-year low, with the global financial crisis hitting sales and profitability. The chamber expects unemployment to rise to 5 per cent by mid year.

M&A News

Consolidated Minerals (CSM) has declined to douse speculation it is planning a takeover for the fellow manganese miner OM Holdings Ltd. (ASX:OMH). OMH vowed to press on with plans to adopt takeover protection provisions, designed to ward off lowball offers. CSM has acquired a 12% stake in OMH and there is mounting speculation it may make a bid for the miner.

AGL Energy(ASX:AGK) has taken just over a week to secure control of Sydney Gas(ASX:SGL) in its A$187 million cash takeover bid, ensuring it will become the operator of the prospective Hunter coal seam gas project. AGL yesterday revealed it had moved to a 54 per centstake in Sydney Gas.

Energy explorer Innamincka Petroleum(ASX:INP) said it is in negotiations to farm out some of its interests. Innamincka said that the negotiations were incomplete with terms not agreed.

Important Corporate News

Babcock and Brown(ASX:BNB) said it had submitted a proposal to the international bank syndicate for a revised business plan which proposes an equity swap that would significantly cut back Babcock's debt levels.

Leighton Holdings(ASX:LEI) has slashed its net profit forecasts for the six months to December 31 by 60 per cent. The move wiped off A$150million in profit and A$240 million in investment valuations, as the global financial crisis crunched the company's property division and slashed valuations on its six listed investments.

Santos Ltd (ASX:STO) has signed a $US585 million new contract to supply natural gas to CITIC Pacific's Sino Iron project, a world-scale magnetite mining project in Western Australia.

Galaxy Resources Limited (ASX:GXY) announced that Mr Anand Sheth has been appointed General Manager Marketing & Business Development for the Company. For the past 10 years, Mr Sheth has been the Lithium and Tantalum Marketing Manager at Talison Minerals Pty Ltd (ex-Sons of Gwalia Limited).

Marion Energy Limited (ASX:MAE)(PINK:MAEJF) respond to a second ASX Price Query in two months, following an increase in the share price. Marion Energy Executive Director Peter Collery maintains that all information has been fully disclosed to the market and the increase in share price reflects investors' increasing awareness of the value of the gas assets and company production milestones. Currently Marion Energy has a gas reserve in Utah estimated at 33.5 trillion cubic feet.

Contact

Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net


Related Companies

Sydney Gas Ltd        
Santos Limited         
Om Holdings Limited          
Marion Energy Limited       
Galaxy Resources Limited        
Cimic Group Ltd          
Babcock & Brown Limited        
AGL Energy Ltd         
Acer Energy Limited       

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