Adelaidenow
Australian share market rises as investors get optimistic
Edited by : AL CIRCLE
3 min read
AUSTRALIAN shares opened higher as a positive start to a month of US earnings buoyed Wall Street overnight and boosted hopes for local equities.
Alcoa, the unofficial kick-off to the US reporting season and a key bellwether stock, reported a net loss in the fourth quarter of last year in line with forecasts but included a forecast for a deficit in world aluminium markets in 2012.
The news drowned out more dismal headlines from Europe, where stocks finished lower after the French and German leaders racheted up pressure on Greece to meet the requirements of its bailout package.
CMC Markets' chief market analyst Ric Spooner said equity markets would be watching to see if US economic data translated into positive earnings over the next month before the local reporting season kicks off in February.
"If these signs of improved demand translate into better than expected revenue growth for companies, it will become difficult for investors to ignore equities at current earnings multiples," he said.
At 1021 AEDT, the benchmark S&P/ASX200 index was up 28.6 points, or 0.7 per cent, at 4,134, while the broader All Ordinaries index was up 28.3 points, also 0.7 per cent, at 4,189.8.
On the ASX 24, the March 2012 share price index futures contract was 41 points higher at 4,113, with 6,025 contracts traded.
Pacific Brands surged 13.4 per cent after the clothing manufacturer confirmed it had received an unsolicited takeover approach from US-based private equity firm KKR.
Materials were the biggest gainers, adding 0.6 per cent in early trade as investors gained appetite for riskier investments.
BHP Billiton rose one per cent to $35.55 while Rio Tinto added 1.1 per cent to $62.84.
Aluminium maker Aluminia also gained six per cent to $1.16, helped by the positive leads from its joint-venture partner US-based Aloca.
The big four banks also were up, adding between 0.6 per cent and 0.3 per cent.
Still, dealers remain wary of ploughing money into shares after a year in which the local benchmark index lost nearly 15 per cent.
Australian fund manager Platinum Asset Management on Monday underscored the challenges faced by investors by forecasting a fall in operating profit before tax in the December half of 2011 to between $92 million and $94 million, down from $113.5 million a year earlier.
Property stocks added 0.2 per cent as investors awaited the release of building approval statistics.
"Investors will be looking for signs of improvement following recent interest rate cuts," said Mr Spooner.
"This will assist not only companies directly exposed to the building sector but provide some insight into the general state of investor and household confidence."
Alcoa, the unofficial kick-off to the US reporting season and a key bellwether stock, reported a net loss in the fourth quarter of last year in line with forecasts but included a forecast for a deficit in world aluminium markets in 2012.
The news drowned out more dismal headlines from Europe, where stocks finished lower after the French and German leaders racheted up pressure on Greece to meet the requirements of its bailout package.
CMC Markets' chief market analyst Ric Spooner said equity markets would be watching to see if US economic data translated into positive earnings over the next month before the local reporting season kicks off in February.
"If these signs of improved demand translate into better than expected revenue growth for companies, it will become difficult for investors to ignore equities at current earnings multiples," he said.
At 1021 AEDT, the benchmark S&P/ASX200 index was up 28.6 points, or 0.7 per cent, at 4,134, while the broader All Ordinaries index was up 28.3 points, also 0.7 per cent, at 4,189.8.
On the ASX 24, the March 2012 share price index futures contract was 41 points higher at 4,113, with 6,025 contracts traded.
Pacific Brands surged 13.4 per cent after the clothing manufacturer confirmed it had received an unsolicited takeover approach from US-based private equity firm KKR.
Materials were the biggest gainers, adding 0.6 per cent in early trade as investors gained appetite for riskier investments.
BHP Billiton rose one per cent to $35.55 while Rio Tinto added 1.1 per cent to $62.84.
Aluminium maker Aluminia also gained six per cent to $1.16, helped by the positive leads from its joint-venture partner US-based Aloca.
The big four banks also were up, adding between 0.6 per cent and 0.3 per cent.
Still, dealers remain wary of ploughing money into shares after a year in which the local benchmark index lost nearly 15 per cent.
Australian fund manager Platinum Asset Management on Monday underscored the challenges faced by investors by forecasting a fall in operating profit before tax in the December half of 2011 to between $92 million and $94 million, down from $113.5 million a year earlier.
Property stocks added 0.2 per cent as investors awaited the release of building approval statistics.
"Investors will be looking for signs of improvement following recent interest rate cuts," said Mr Spooner.
"This will assist not only companies directly exposed to the building sector but provide some insight into the general state of investor and household confidence."
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