Australia’s sharemarket has started the week on a positive note, rising 1% in morning trade as bargain hunters stepped in after positive leads from Wall Street.
After last week’s disastrous performance – the Australian market plunged 6.6% on concerns about the European debt crisis and the introduction of the Resources Super Profits Tax – the benchmark ASX 200 rose 1.3% or 56.1 points in early trade to be at 4361.5 points at 12:15 AEST.
Newscorp, AMP and ANZ bank led the majors this morning rising at least 2%, while BHP Billiton and the other three major banks all recorded small gains.
A host of smaller mining companies led the market higher this morning, led by Murchison Metals, which jumped 8.7% to 16.5c on the news that the West Australian Government had allocated funding for the Oakajee Port in the state budget.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
On the other side of the ledger, Macarthur Coal fell a further 3.4% to $10.29 following its decision last week to rebuff a takeover offer. The takeover premium in Macarthur’s share price is being rapidly removed by investors who now believe a deal is unlikely in the short-term.
M&As set to rise
While sharemarket conditions clearly remain volatile, Australian executives are keeping their eyes on expansion, according to a survey from Ernst & Young.
Nearly half of Australian executives survey said they intended to buy, sell or merge in the next six months, compared with just 33% six months ago.
E&Y partner Graeme Browning said companies are particularly looking to expand into Asia as part of their growth efforts.
Danks to buy Gunns retail businesses
Hardware company Danks, which was recently acquired by a joint venture company owned by Woolworths and US hardware giant Lowe’s, has announced it will buy the retail division of Tasmanian timber company Gunns for $40 million.
The acquisition includes five hardware stores, one timber joinery centre, one truss manufacturing plant and a support office, all located in Tasmania.
The deal is expected to be completed by 31 May.