The market is down 25. The SFE Futures were up 14 this morning.

The Dow Jones closed up 78 overnight. Dow up 167 at best on hopes of a European solution. Merkel and Sarkozy are in “complete agreement” on a plan to impose budget discipline across the region and said the EU treaty will need to be rewritten. Towards the end of the session, Standard & Poor’s issued a warning that the euro area’s six AAA rated countries, including Germany and France, could be stripped of their AAA credit ratings within 90 days and have been placed on “CreditWatch negative”, depending on how the EU Summit goes this week. Bonds were also supported on reports that the ECB is preparing to inject of €1 trillion for the EU through additional bond buying. Spanish and Italian bond yields both fell. The oil price down 40c to $100.56, Gold fell $24.50 to $1726.80 and the Aussie dollar increased to 102.71c from 102.68c.

Main points:

  • The Reserve Bank of Australia holds their monthly meeting today with an interest rate decision expected at 2:30pm. It is a 50:50 decision. Retail stocks will be reacting either way.
  • Iron Ore Holdings (IOH) has made a large magnetite discovery within 10 kilometers of Rio Tinto’s Mesa J iron ore min in the Pilbara region. IOF up 2c to 126.5c.
  • BHP Billiton (BHP) says production at their recently acquired Petrohawk Energy increased 46% in the first 9 months to 940m cubic feet of natural gas equivalent a day. BHP down 13c to 3713c.
  • Abacus Property Group (ABP) has refinanced $692m of debt facilities. ABP down 0.5c to 119.5c.
  • Evolution Mining (EVN) has successfully completed their retail bookbuild. Patersons have a Buy recommendation on EVN with a 228c target price. EVN down 6c to 172c.
  • Cudeco Ltd (CDU) up 4c to 418c after announcing they have successfully completed the placement of 23.9m shares at 360c. Total funds raised totaled $86.3m.
  • Brokers are positive on UGL Ltd’s (UGL) acquisition of DTZ for $119m. Most have either a Buy recommendation on Overweight recommendation. One broker cut their recommendation to Hold from Buy. UGL up 7c to 1290c.
  • Harvey Norman (HVN) executive chairman Gerry Harvey said although a share buy back would be a good way to take advantage of the $645m worth of franking credits on their balance sheet, he is not prepared to raise funds to pay for the exercise. HVN up 2c to 218c.
  • A bit of talk around that Fairfax Media (FXJ) could merge with Nine Entertainment, although a restructure of Nine’s balance sheet is the most likely option to solve their debt worries. FXJ down 1.5c to 83.5c.

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