The market is up 53. The SFE Futures suggested a 58 point rise in the market this morning. Resources just up — BHP unchanged. Copper and Zinc both up over 5% last night and the respective metal stocks are flying again today. Property trusts all up. Financials up nearly 2%. Banks all doing well after another strong night in US financials. Industrials up 2.5% with the majors all up.

The Dow was up 109. Up 121 at best. Down 50 at worst. Financial stocks led the way — 5.6%. Technology stocks underperformed. Fed’s Beige book said the pace of economic contraction is slowing. Intel beat earnings expectations. BHP up 1.95% and RIO down 1.69% in ADR form. Metals all up. Oil price down 25c to $49.26. Gold up. Bonds up. A$/US$ down.

RIO Released its 1Q Production figures yesterday. In line with expectations. No news regarding production cuts, closures or project deferrals nor more importantly an update on the Chinalco transaction. Management was grilled at the AGM in London last night about the deal and their remuneration set up. Their main business Aluminium was broadly in line. RIO said it expects global iron ore sales of 200mt in 2009. Among the big broker recommendation — three BUYS, two SELLS.

  • OneSteel Ltd (OST) extended the trading halt on its stock until Monday for a proposed $559m capital raising at 180c per share, a 30% discount, starting Thursday. OST cut their FY operating profit guidance to about $200m from their February forecast of between $325m-$375m due to the deterioration in the steel and iron market. Said their dividend is likely to fall.
  • Iluka Resources (ILU) post quarterly production and development report — 1Q total mineral sand production at 528,500 tons, down 23.8% on-year. Total mineral sands 1Q sales down 77.2% to $44.5m.
  • Leighton Holdings (LEI) said its United Arab Emirates joint venture, Al Habtoor Leighton, withdrew from the Dubai Airport Project. LEI says the withdrawal won’t impact on FY09 results.
  • Australand Property (ALZ) secures three new refinancing approvals with three major banks to provide $350m. ALZ expects FY09 operating profit to be down 30% on-year to the bottom end of its guidance range. Also notes the cuts to discretionary spending and jobs.
  • Timbercorp Limited (TIM) out of a trading halt — they have given a negative company update on their refinancing position and assets sales.
  • Cockatoo Coal (COK) note a 2.3MT JORC indicated resource at their Baralaba mine.
  • Transpacific Industries (TPI) update on their capital structure saying positive talks continue with potential investors.
  • Australian Agriculture Co (AAC) complete the sale of three cattle stations for a $145.7m.

Other…

  • UBS Warburg (UBS) upped their price target on Harvey Norman (HVN) to 275c from 200c saying HVN looks attractive on a “through the cycle valuation” but sees no reason for outperformance in the short term. Goldman Sachs JB Were keep a HOLD recommendation with 301c price target. Citi cut to HOLD from Buy with a 275c price target.
  • Goldman Sachs JB Were keep a HOLD on Woolworths (WOW) with a 3032c price target predicting WOW will announce 3Q09 sales of $12.304bn, up 5.7% on this time last year.
  • Chinese GDP economic data out at midday today — expecting +6.2%. Also Retail sales and industrial production and some others. Some fears about falling short of expectations as recent stimulus initiatives may not yet have kicked in. GDP growth over 2008 was 9.0%.
  • Street Talk says it’s now a three horse race for Royal Bank of Scotland’s $2.5bn Asian assets. ANZ Bank is one of those and is being advised by Credit Suisse.

The Dow Futures suggest a 44 point rise on Wall Street.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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