Chinese bid for Rio lifts market: Economy roundup
Monday, 4 February 2008
Mike Preston, economic editor
A move by Chinese aluminium giant Chinalco to seize a 12% stake in Rio Tinto has helped fuel a strong positive sentiment on Australian markets today.
At just after 12.20pm the S&P/ASX200 is up 1.8% on Friday’s close to 5946.7, with resources stocks leading the way.
Although the action by Chinese Government-backed Chinalco to grab a big stake in Rio Tinto took place on London markets, the move will increase confidence that China will have ongoing demand for Australian commodities despite the slowing US economy.
The dramatic move overshadowed the release of jobs data showing that more than 17,000 jobs disappeared from the US economy in January, the first time in more than four years that jobs growth has gone backwards.
In Australia, by contrast, some much needed ground was clawed back on the international trade front in December, with the trade deficit declining $226 million to just over $1.93 billion.