The Australian share market has surged over 2% this morning due to positive gains overnight on Wall Street, which jumped 3% on better than expected results from chip manufacturer Intel.
The benchmark S&P/ASX200 index was up 82.5 points or 2.1% to 4007 at 12.00 AEST. The Australian dollar also gained ground up to US80c.
ANZ lifted 1.3% to $16.71, while NAB also gained 2.4% to $23.91. Westpac rose 1.7% to $20.30 while Commonwealth Bank rose 1.7% to $39.48.
In the US, Wall Street investors reacted positively to better than expected results from chip maker Intel which could signal a recovery in technology spending.
Intel share prices jumped 7.3% to $US18.05, which pushed up rival AMD shares 8.7% to $3.86. IBM also contributed to the rally, with shares rising 3.9% to $US107.22.
“Intel is the guts of the whole technology industry, so when they’re talking about consumers getting more active on the PC front, that augers well for a lot of different things,” David Katz, chief investment officer at Matrix Asset Advisors, told Reuters.
Additionally, new manufacturing data showed the rate of decline in that sector is slowing, while minutes released from the latest Federal Reserve meeting indicated officials believe that economic contraction is slowing as well.
“With the Fed saying that things are looking a little bit better than they thought, that means profits will uniformly look better than everybody thought,” Marc Pado, US market strategist at Cantor Fitzgerald & Co, also told Reuters.
The Dow Jones Industrial Average rose 256.72 points, or 3.0%, to 8,616.21.
Chinese economy surges
Also overseas, The Beijing Times newspaper has cited unofficial sources who said the Chinese economy grew by 7.9% in the second quarter, from the previous year.
The National Bureau of Statistics will release the country’s GDP data later today.
Also in China, mining giant Rio Tinto has evacuated staff in China who are involved in research of the iron ore and steel industries after some of the company’s traders have been detained by state authorities.
The Australian Financial Review has reported that other foreign companies are moving their employees out of the country.
Stern Hu, Tinto’s head of iron ore marketing in China and three other members of the company’s iron ore team have been detained on suspicion of espionage.
NAB confirms internet problems
Back home, just days after Commonwealth Bank suffered a hit to its net banking facilities, NAB is now experiencing problems of its own.
”We can confirm that we are experiencing some technology issues which are affecting our internet banking,” a spokesperson told The Age. “We are investigating and apologise for the inconvenience.”
”We are investigating the issue and at this stage do not want to speculate on what has caused it. We have a team of people working on it and hope to get the problem resolved as soon as possible.”
The bank is also having troubles in New Zealand, where the High Court has found its Bank of New Zealand subsidiary must pay $NZ416 million worth of tax assessments.
“The High Court judgment released today in relation to the Structured Finance Tax Case found against BNZ,” NAB said in a statement to the ASX.
“The tax in dispute for all transactions is $416 million. In addition, as at 30 June 2009, BNZ is liable to use of money interest of $238 million (net of tax). The possible application of penalties has yet to be considered by the IRD.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
