Stocks open up after european fund vote

Published by, September 2011

The Australian share market opened flat after the US market's less-than-expected response to Germany's approval to beef up Europe's rescue fund to stave off a second global recession.

However, within 10 minutes of the open, local shares had fallen by about two points, only to bounce back to positive territory minutes later.

At 1015 AEST the benchmark SP/ASX200 index had risen 4.2 points, or 0.1 per cent, to be at 4,012.5, while the broader All Ordinaries index gained 3.5 points, or 0.09 per cent, to 4,071.4.

Wealth Within analyst Janine Cox said she had expected shares to lift higher than they did after Germany's parliament ended weeks of speculation about Europe's rescue fund on Thursday, by approving an expansion of the eurozone's rescue fund after the local market closed.

She said the local bourse hadn't reacted strongly, or Wall Street as strongly as she'd expected, with investors taking a wait-and-see approach to equities.

US blue chips rebounded but tech stocks fell Thursday after the crucial EU bailout vote and new US data gave the economy a slightly more positive tint.

The Dow Jones Industrial Average closed up 143.08 points (1.30 per cent) at 11,153.98.

The broader SP 500 added 9.34 (0.81 per cent) to 1,160.40, but the tech-heavy Nasdaq Composite fell 10.82 (0.43 per cent) to 2,480.76.

"There's still a situation that six other countries have to vote yet (on the eruozone bailout) so it's not a done deal yet so that's why I think people are just waiting to see what happens," she said.

Ms Cox said the local market was still settling down after a heavy sell-off of commodities over the past week.

In offshore trade, gold rose modestly on Thursday.

The spot price of gold in Sydney was $US1, 623.05 per fine ounce, down $US1.94 from Thursday's close of $US1,624.99.

The energy sector led the market at the open, rising 0.68 per cent after world oil prices picked up Thursday.

Woodside Petroleum rose 20 cents to $32.34 and Santos added seven cents to $11.34.

Platinum metals producer Aquarius Platinum was the strongest stock on the ASX 100, jumping 8.1 percent to $3.07.

Grocery brand group Goodman Fielder was the weakest stock on the same index, plunging 18.9 percent to $44.50 after announcing it had raised about $190 million through an institutional capital rising.

Qantas gained half a cent to $1.43 despite Transport Workers Union employees walking off the job for a second time this week. More than 8000 domestic and international passengers' flights were expected to disrupted on Friday by the strikes.

Turnover was 332.25 million shares worth $2.89 billion, with about five of every 10 stocks rising.

The December share price futures index (SPI) gained 12 points to 4,018 points, with 9,082 contracts traded.

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