The market is up 25 but on tiny volumes. SFE Futures were up 19 this morning.
Dow Jones up 78. The Dow was up 161 at best. The Dow and S&P500 were up on positive leads out of Europe that were unperturbed by the eurozone’s unemployment rate, which came in unchanged at a record high of 11.4% in August. Eurozone PMI number rose from 45.1 to 46.1 in September, which was better then expected. The US ISM manufacturing index was up from 49.6 to 51.5 in September, well above forecasts of about 49.7 and the first expansion after three months of contractions. Employment, orders and prices paid all rose.
There are growing expectations that Madrid will ask for financial aid by the end of the week. Moody’s issued a statement recently advising Spain that it may have underestimated the size of the banking bailout. If Moody’s cuts Spain’s government bonds to junk bond status, it would be tough for the country to delay any further requests for a sovereign bailout.
Best sectors — were healthcare (+0.6%), consumer goods (+0.6%), energy (+0.5%), financials (+0.5%) and basic materials (+0.5%). Worst sectors — utilities (-0.4%), telecoms (-0.3%) and technology (-0.3%). European markets up — UK FTSE was up 1.37%, German DAX up 1.53%, France up 2.39%, Spain up 0.98% Italy up 2.83% and Greece up 0.72%. The Stoxx Europe 600 index was up 1.4%, with basic materials (+2.2%) and financials (+2.2%). BHP Billiton up 2.6% and Rio Tinto up 1.8% in London. Metals up — copper up 1.08%, nickel up 1.34%, aluminium up 0.61% and zinc up 0.48%.The spot iron ore price was unchanged at $104.20. Oil up 10c to $92.29. Oil was on light volumes as markets wait for further US job numbers later this week. Gold up $4.40 to $1778.30. A$ is at 103.65.
- Fortescue Metals Group (FMG) — The High Court of Australia has found FMG and the company chairman, Andrew Forrest, did not mislead investors over mining and infrastructure agreements with three Chinese state-owned entities eight years ago. Shares remain in trading halt.
- Qantas (QAN) has announced an agreement to sell its 50% stake in StarTrack to Australia Post and acquire 100% of the air freight business Australian Air Express. QAN will receive $408 million plus completion adjustments of approximately $5 million. The transaction is expected to bring in profits of $30 million. QAN is up 2.31% to 121.75c.
- Sundance (SDL) — China’s Hanlong Group is unable to secure a financial commitment from China Development Bank for the $1.4 billion takeover until the middle of October due to the Chinese holidays and negotiations on conditions attached to the facility. SDL said that it would “enter into a five-business-day good faith consultation period”. Shares will be suspended from trading over that period.
- Santos (STO) has bought a part of Central Petroleum (CTP) exploration acreage, spending up to $150 million and expanding its holdings to more remote areas of Australia. CTP is up 14.81% to 15.5 and STO is up 2.04% to 1151c.
- All eyes will be on the RBA ahead of their interest rate decision at 2.30pm. Analysts are divided on whether rates will be cut.
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