Afternoon market insights: new jobs take markets higher

The Australian market rose today after positive leads from the US overnight and the calming of financial markets by the European Central Bank, who said they will act to prevent Spanish bond yields going too high. The official March unemployment rate remained at 5.2%, despite a growth in jobs reported by the Australian Bureau of Statistics today.

Only the gold sector declined today. Australian resources, metals and mining, telecommunication services, consumer discretionary, materials, consumer staples, energy, industrials and information technology services all gained.

The S&P/ASX200 was up 0.68% to 4274.90. The All Ordinaries Index was up 0.67% to 4356.20.

“Today we will see a little bit of rebound after five or so days of negative market activity, but there are significant headwinds on the horizon,” Tim Schroeders, who helps manage $1 billion at Pengana Capital in Melbourne, told Bloomberg. “It’s still very much the time to be cautious. Spain and Italy continue to be problems in Europe, and we’ve got an imminent North Korean rocket launch, which over the next few days people will be watching with interest.”

The day’s winners

Seven Group Holdings (ASX: SVW) was up 5.61% to $10.36 at 2.20pm. The media and mining services/equipment company announced today it had purchased the caterpillar distribution and support business operated by Bucyrus which will give it a larger Caterpillar (CAT) earth moving product range (148 new models) as well as new customers in NSW, ACT and WA, more skilled staff, increased revenues and productive synergies. Discussions are continuing with CAT in relation to Bucyrus’ China territories.

PanAust (ASX: PNA) rose 5.05% to $3.12 at 2.40pm. The mining company has reaffirmed its 2012 production targets after exceeding expectations at its flagship copper mine in the three months to March. Copper prices rose today. Production at the Phu Kham mine in Laos exceeded the company’s budget expectations.

The day’s losers

Silver Lake (ASX: SLR) had fallen 4.38% to $3.06 by 2.40pm. Silver Lake is a gold producing and exploration company with operations in Mount Monger and the Murchison goldfields of Western Australia.

Mirabela Nickel (ASX: MBN) was down 3.74% to $0.515 at 2.50pm. Mirabela Nickel owns the Santa Rita nickel sulphide mine and is listed on the Australian and Toronto stock exchanges (TSX: MNB). Nickel prices have fallen lately and Mirabela’s share price has reacted.

Sector movers

The strongest sector was the S&P/ASX 200 Information Technology (Sector) index which was up 1.95% to 542.7 at 2.30pm.

The weakest sector was the All Ordinaries Gold (Sub-Industry) which was down 0.11% to 5917.90 at 2.30pm AEST.

Currency

The Australian dollar rose slightly today on good Australian job figures. One Australian dollar was buying $US1.0371 at 2.55pm.

Asian markets

Asian financial markets were up slightly today after renewed worries over European debt problems receded. The MSCI Asia Pacific Index rose 0.2% to 123.33 at 12:44pm in Tokyo. Chinese car sales grew by 1.4 million units last month and the Shanghai Composite Index gained 0.4%. South Korean shares dropped ahead of a North Korean long range rocket launch.

Japan’s NIKKEI 225 was up 0.29%, or 27.84 points, to 9486.58 at 3pm AEST.

Hong Kong’s Hang Seng was also up 0.36% or 72.16 points to 20212.80.

“Asia still looks really cheap,” Chong Yoon-Chou, the Singapore-based investment director at Aberdeen Asset Management Asia, said in a Bloomberg Television interview. The company oversees about $295 billion. “If you’re seeing it through the next year or two years, there are still good valuations.”

China

Bo Xilai’s political downfall may have a stabilizing influence on China’s economy by unifying the ruling Communist Party ahead of a transfer of power from one president to another and prevent a push towards Xiliai’s preferred government-led economic model. Read more.

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