The Australian sharemarket has opened 1% higher this morning after a solid result on Wall Street, where stocks rebounded 4% after plummeting 500 points the previous day.
Analysts are beginning to question whether the volatility seen over the past week will remain, although some bankers and executives predict that turmoil in markets may last for the next several months as sovereign debt crises continue.
The benchmark S&P/ASX200 index was up 60 points or 1.45% to 4201 at 12.00 AEST, while the Australian dollar also opened stronger, trading at $US1.03c.
AMP shares rose 2.02% to $4.05, while NAB shares rose 1.57% to $23.25. Westpac shares gained 1.32% to $20.72 as ANZ shares lifted 0.75% to $20.24. News Corp recorded the biggest gain of the morning, with shares rising nearly 7% to $15.78.
In the United States, the Dow Jones Industrial Average rose 3.95% to 11,143.31, with good financial results from Cisco dampening fears. New data showing that jobless claims have hit a four-week low have also bolstered hopes of recent market volatility ending.
Westfield will spend $160 million to buy into a new development site in Milan for a new shopping centre, the company announced this morning. It will acquire a 50% stake for “a world class iconic regional shopping centre similar in scale and quality to Westfield London”.
“We believe that this site represents one of, if not the, best shopping centre development opportunities in Continental Europe,” chairman Frank Lowy said.
“(Westfield) expects the 170,000 square metre project would represent a total investment in the range of $A1.37-1.71 billion with a target yield in the range of 7-7.5% and an unlevered internal rate of return of 12-15%.”
The Government’s plan to return the budget to surplus in the 2012-13 financial year is now an “objective”, according to treasurer Wayne Swan, prompting speculation the Government will delay the elimination of the deficit.
The comment has drawn criticism from opposition leader Tony Abbott.
“We have put in place the objective of coming back to surplus in 2012/13 because that’s important to send a message to the world that there’s a very strong, consistent and clear fiscal policy in Australia,” Swan told ABC Radio this morning.
“We put it in place because it was the responsible thing to do when we moved to stimulate the economy,” he said. “The fact is we don’t make our fiscal policy on the run.”
Tiger Airways has resumed its services this morning after a month-long grounding by the Civil Aviation Safety Authority, trading under a new set of conditions.
“The airline would like to reassure all Australians that safety underpins the operation at all times,” Tiger spokeswoman Vanessa Regan told AAP. “Tiger’s focus moving forward is on improving reliability as well as providing Australians with safe and affordable air travel.”
“Tiger Airways is committed to a safe and viable long-term future in Australia.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
