Shares jump sharply on US good news
Wednesday, 12 March 2008
Mike Preston, economics editor
Australian sharemarkets have surged by more than 3.5% this morning following a US Government move to ease the financial crisis overnight.
The S&P/ASX200 is up 3.6% on yesterday’s close to 5318.0 at 12.15pm, but was up as much as 235 points, or 4.59%, earlier in the morning.
The cause of all the optimism was an announcement by the US Government overnight that it will inject $US200 billion into global financial markets in exchange for debt backed by mortgage-linked securities.
That sent US markets up, with the Dow Jones Index finishing up 3.55% on yesterday’s close to 12,156.81, a lead that Australian markets have followed this morning.
Banks have been the big winners on the market this morning, but bargain hunters have also taken the chance to buying into resource companies not directly exposed to the sub-prime squeeze.
In other economic news today, new lending data shows that business continued to borrow strongly in January despite rising rates. Commercial finance increased 14.4% in January, ahead of mortgage lending up 1.7% and personal finance up 0.1%.
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