Australian Market Report of March 18: Steady Gains Prospect

ABN Newswire - Overnight Wall Street closed significantly higher on better-than-expected US housing starts. Investors believed the market is moving towards a gradual and steady gaining territory and started to buy in stocks of banks and consumer companies.

Yesterday the Australian share ended 3.1% higher lifted by banks and miners. The benchmark S&P/ASX200 index gained 103.5 points at 3,451.9, while the broader All Ordinaries index was up 96.1 points, or 2.91 per cent, to 3,393.4. Today the local market has delivered a strong opening boosted by Wall Street's rally.

Key Economic Facts and Figures

The Reserve Bank of Australia has released the minutes of the RBA March 3 meeting. The board of RBA believed that leaving the cash rate on hold at 3.25 per cent would provide adequate flexibility for policy at future meetings.

Today the Westpac/Melbourne Institute releases index of economic activity. The index dropped 0.6 of a percentage point in January, dragged lower by slumping share prices, US industrial production and home approvals. "The leading index is now in deeply negative territory consistent with contracting economic activity," said Westpac senior economist Matthew Hassan in a statement.

M&A News

ANZ's (ASX:ANZ) finance unit Esanda Finance Corporation will become a bank division. ANZ said in a statement that Esanda's earnings and balance sheet are already consolidated with the bank's for reporting purposes. The transition involved the transfer of A$13 billion worth of assets from the Esanda entity to ANZ.

Important Corporate News

Ansell (ASX:ANN) said it has won a $US1.6 million contract to supply lubricant and 20 million condoms to the New York City Department of Health.

Commonwealth Bank (ASX:CBA) said that the bank would remain its guidance on dividends. The ANZ and National Australia Bank (ASX:NAB) have already flagged dividend cuts.

David Jones Ltd (ASX:DJS) has posted a 2.4 per cent rise in net profit for the half year to January 24 2009 to A$91.2 million, up from A$89 million on the prior corresponding half. The company reaffirmed its net profit growth guidance of up to 5 per cent for second half of 2009.

Rio Tinto (ASX:RIO) last night appointed Jan du Plessis, an existing director, as its new chairman following the resignation of its previous chairman designate Jim Leng. Mr du Plessis will replace Paul Skinner as the company's chairman on April 20.

Territory Resources (ASX:TTY) has posted a A$33.34 million first-half loss, compared with a profit of A$2.03 million in the previous corresponding period. The loss is largely due to its booking A$38 million in charges related to investments and currency movement.

ANZ has appointed Graham Hodges as its new deputy chief executive after the incumbent, Bob Edgar, decided to retire.

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