Sydney, Feb 18, 2009 AEST (ABN Newswire) - US stocks tumbled overnight as traders worried the automakers might not be able to submit the restructuring plan before the deadline. Obama's signing the $US 780 billion stimulus plan into law failed to inspire the bearish market after investors digested the government measures over the long holiday weekend, fearing the bailout could not turn around the recession in a short run.
Yesterday Australian shares plunged sharply, dragged by financial stocks as investors feared the UK banks might need to raise more funds. The unfavorable corporate earnings results also weighed down the market. The benchmark S&P/ASX200 was down 1.5%, or 52.6 points, to 3464.3, while the broader All Ordinaries index lost 1.4%, or 49.1 points, to 3412.2.
Key Economic Facts and Figures
The Melbourne Institute Wages Report for February shows that wages grew marginally in the three months to February, lifted by overtime and bonus payments despite economy downturn. The report found growth in total pay rose to 4.2 per cent in the year to February, compared with 4.0 per cent in the 12 months to November. However, the survey also forecasts the growth rate to slow in the next year.
The Reserve Bank of Australia Tuesday said in its board meeting minutes that future interest rate decisions will be based on assessments of medium-term prospects and short-term data. It raises anticipations RBA may remain the official interest rate steady in March.
Today the Australian Bureau of Statistics releases retail trade data for the December quarter, and merchandise imports data for January.
It is speculated that the London-based Anglo American and China Investment Corp are in talks to take big stakes in Fortescue Metals Group (ASX:FMG) as representatives from the two possible bidders had visited Fortescue last week.
BG Group (LON:BG) has lifted its cash bid for Pure Energy (ASX:PES) to A$995 million. Analysts are tipping that it could not rule out the possibility of new bidder to join the takeover contest.
Important Corporate News
Westpac Banking Corp (ASX:WBC) reported a 2% fall in first-quarter profit to A$1.2 billion as its impairment charges rose to A$800 million for in the December quarter, from A$144 million in the prior corresponding period.
Virgin Blue (ASX:VBA) will cut up to 400 jobs after the airline decided to ground five aircraft from its domestic operations. The grounding will reduce capacity by a further 8 per cent next financial year.
Ten Network (ASX:TEN) moved to raise around A$90 million from sharemarket via institutional placing of 120 million new shares, after unveiling a 28 per cent fall in first-half profits.
CSR Limited (ASX:CSR) forecasts its fiscal profit after tax to be in the range of A$125-A$140 million, down from A$192.8 million in previous financial year.
Foster's (ASX:TRS) has decided to split its Australian wine and beer businesses as part of a restructuring plan.
CSL Limited (ASX:CSL) posted a 44 per cent jump in its first-half net profit. The profit for the period ending December 31, 2008, rose to A$501.9 million from A$348.7 million in the first half of fiscal 2008.
The Reject Shop (ASX:TRS) said sales was up 16.6 per cent in the first half, to December 28, growing from A$190.1 million to A$221.6 million.
Transurban Group (ASX:TCL) said net profit fell 86.4 per cent to A$1.896 million in the six months ended December 31 from A$13.93 million for the first half of last year.
Western Australian rare earths mining company, Arafura Resources (ASX:ARU) have agreed to execute a letter of intent with Jiangsu Eastern China Non-ferrous metals investment holdings Co, a subsidiary of East China Exploration & Development bureau (ECE) to assist with funding requirements and future project developments of their rare earth mines.
Asia Business News Asia Bureau
Westpac Banking Corp
Virgin Blue Holdings Limited
The Reject Shop Limited
Ten Network Holdings Limited
Pure Energy Resources Limited
Fosters Group Limited
Fortescue Metals Group Ltd
BG Group plc
Arafura Resources Limted
Anglo American plc