RTTNews - Despite none too encouraging cues from Wall Street, the Australian stock market opened on a firm note Monday with select resource, bank and healthcare stocks posting sharp gains in early trading.
The benchmark index S&P/ASX 200 rose to 3,932 after opening at 3,908 and is currently trading at 3,924.6, up 25 points over its previous close. The broader All Ordinaries index is up 23 points at 3,917.4. On Friday, the S&P/ASX200 had ended up 7.5 points at 3,899.6, while the All Ordinaries moved up by 7 points to 3,894.4.
Materials stock BHP Billiton is up 1.7% over its previous close. Among other stocks in the materials space, Fortescue is gaining nearly 4%. Orica, Rio Tinto and Newcrest Mining are trading modestly higher.
WorleyParsons, which had scored a hefty gain on Friday after the company bagged two nuclear power contracts, is trading firm this morning with a gain of 1.5%.
National Australia Bank Ltd has acquired Aviva Australia Holdings' wealth management business for A$825 million. The bank expects the acquisition to be accretive to earnings per shares and return on equity in the first full year post-acquistion. The purchase includes Aviva's life-insurance operations and investment platform, called Navigator. The bank stock is up with a modest gain of 0.7% at present.
APN News & Media has completed an equity sale to raise A$99 million. The funds from the one for five entitlement offer, will be used to reduce the firm's debt and strengthen its balance sheet. The media stock is currently down 4.4%.
In another news, mining group Xstrata has confirmed it has made an approach to rival Anglo American about a merger that would create one of the world's biggest mining companies, according to a company statement. According to reports, Xstrata's chief executive Mick Davis wrote to the Anglo American board last week with a view to launching discussions about a possible $A83.69 billion deal.
The combination would create a premier portfolio of operations diversified across multiple commodities and geographies, with enhanced scale and financial flexibility to fund future growth, Xstrata said.
In the currency market, the Australian dollar opened higher on Monday after the safe-haven U.S. dollar came under heavy selling pressure during the offshore session. Earlier this morning, the Australian dollar was trading at US$0.8052/55, up from Friday's close of US$0.8043/47. Currently, the Australian dollar is trading at 0.8002 to the U.S. dollar.
In economic news on Monday, the Australian Bureau of Statistics will release data on new motor vehicle sales in May. In addition, the Committee for the Economic Development of Australia releases its Mid-Year Market Review on the outlook for the South Australian economy.
Among other markets in the Asia-Pacific region, Japan is edging higher after a negative start. New Zealand, Singapore and Korea are also currently trading in positive territory with modest gains.
On Friday, stocks ended on a mixed note on Wall Street despite a fairly strong start. Trading was lackluster for most of the session as traders stayed away amid a lull in economic data. The Dow closed down 15.87 points at 8,539.73, the Nasdaq closed up 19.75 points at 1,827.47 and the S&P 500 closed up 2.83 points at 921.20.
Stock markets across the Asia Pacific region had ended Friday's session with solid gains. Japan's benchmark Nikkei 225 Index closed up 0.9 percent, while Hong Kong's Hang Seng Index finished up 0.8 percent.
Major European markets also finished the day higher. The French CAC 40 Index and the U.K.'s FTSE 100 Index closed up 0.9 percent and 1.5 percent, respectively, while the German DAX Index closed just above the unchanged mark.
After posting modest gains in the previous two sessions, crude oil prices had closed below US$70 on Friday on the New York Mercantile Exchange amid concerns that supplies will outweigh demand. Light sweet crude for July delivery settled at US$69.55 per barrel, down US$1.82, its lowest close since June 8.
Prices had reached as high as US$72.30 Friday amid early worries over violence in Nigeria. The Movement for the Emancipation of the Niger Delta claimed it has blown up an Agip pipeline that delivers to a Brass export terminal. Two days earlier, the group attacked a Royal Dutch Shell pipeline.
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