The market is up 36. The SFE Futures were up 32 this morning.

The Dow Jones closed up 52 overnight. Standard and Poor’s said the EFSF may lose its top credit rating if any of its guarantors’ debt is cut after they put 15 euro nations on review for possible downgrade. There were reports that European leaders might create a 2nd bailout fund, which would nearly double the capacity of Europe’s finance rescue programs. ECB President Draghi is expected to cut interest rates by 0.25% after he signaled last week that the bank may step up its efforts. Metals were mixed on the LME, the oil price put on 18¢ to $101.17 and gold fell $2.90 to $1731.90. The Aussie dollar is now buying 102.70¢ on strong GDP data.

Main points:

  • Australia’s GDP rose 1.0% in the September quarter, while a 0.8% rise was expected. GDP growth for the year was 2.5%, well above the 1.9% expected. 
  • Adelaide Brighton (ABC) expects net profit for the year to come in the range of $146m-$152m compared to an actual $151.4m in the fiscal year ended Dec 31. They add that demand for cement is similar to 2010, while demand for concrete products remains weak due to soft housing and retail activity. ABC last traded at 298c. ABC down 1%.
  • The Bank of QLD (BOQ) had their issuer credit rating downgraded from BBB+ to BBB, while Bendigo and Adelaide Bank (BEN) had their issuer credit rating upgraded from BB+ to A-. BOQ up 13c to 807c and BEN up 9c to 943c.
  • Lend Lease (LLC) has sold their 75% interest in Chelmsford Meadows Unit Trust for $65m. LLC up 5c to 740c.
  • PanAust (PNA) said production from their Phy Kham copper-gold mine in Laos has returned normal levels following heavy rains that restricted mining during the previous quarter. PNA up 1c to 340c.
  • The papers are convinced that the Aston Resources (AZT) and Whitehaven Coal (WHC) merger is going ahead despite both companies saying that nothing has been confirmed and all they have done is talk. The AFR says both are in the final stages of negotiations. AZT up 13c to 958c and WHC up 12c to 575c.
  • Patersons has upped their recommendation on Orica (ORI) to Buy from Hold following the restart of the ammonium nitrate plant. They have a target price of 2950c, down from 3020c. ORI down 6c to 2579c.
  • The Reserve Bank of Australia (RBA) yesterday cut interest rates for the second consecutive month by 25bps to 4.25%. The main message was that Inflation is likely to be consistent with their target in 2012 and 2013 and that growth in the global economy has moderated.

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