30 Jul 2008

Australian stocks rise 2%

1:13 pm on 30 July 2008

The Australian share market opened 2% stronger on Wednesday after a bounce on Wall St.

A move by Merrill Lynch move to dump mortgage debts and raise $US8.5 billion in new capital boosted hopes the financial sector was moving on from posting big losses from the housing slump.

At 1015 AEST the S&P/ASX200 index had surged 107.5 points, or 2.19%, to 4953.7, while the broader All Ordinaries leapt 96.2 points, or 1.95%, to 5019.5.

The September share price index futures contract added 104 points to 4,930 on volume of 6,048 contracts.

Banks were back in favour with ANZ Banking Group lifting 52 cents, or 3.35%, to $A16.04. National Australia Bank was up 99c, or 4.12%, to $A25.80.

Commonwealth Bank of Australia jumped $A1.34, or 3.41% to $A40.64 and Westpac firmed 74c, or 3.56%, to $A20.93. St George Bank climbed 94c, or 3.75%, to $A26.64.

Other markets

US crude oil prices dropped more than 2%. Crude for September delivery settled down $US2.54, or 2.04%, at $US122.19 a barrel - about $US25 below a record price of $US147.27 on 11 July.

The Dow Jones industrial average rose 266.48 points, or 2.39%, at 11,397.56. Standard & Poor's 500 Index gained 28.82 points, or 2.33%, at 1,263.19. The Nasdaq Composite Index rose 55.40 points, or 2.45%, at 2,319.62.

Trading volume was light on the New York Stock Exchange, with about 1.40 billion shares changing hands. But volume was high on the Nasdaq, where about 2.31 billion shares were traded.

European shares also ended higher on Tuesday after a three-day losing streak.

The FTSEurofirst 300 index of top European shares closed 0.3% higher at 1,162.57 points.

In other markets: the DAX index ended at 6,398.8 points, up 47.65 or 0.75%. The CAC-40 index closed at 4,320.49 points, down 3.96 or 0.09%. The Swiss market index closed at 6,993.3 points, up 24.37 or 0.35%.

In Britain, the FTSE 100 index was up 6.6 points, or 0.1%, at 5,319.2. The index is down 17.6% for the year to date.