Shares gain ground, Global grow just above zero, Iceland govt collapses due to financial crisis – Economy Roundup

Australian investors have started the trading week in a good mood following the Australia Day holiday, with the local sharemarket opening 2% higher today after positive leads from Wall Street last week and strong gains from the mining sector.

 

The benchmark S&P/ASX200 index was up 81.2 points or 2.43% to 3,423.9 at 12.00 AEDT.

The Aussie dollar also gained ground to US65 cents.

BHP Billiton led the charge today, gaining 5.3% to $28.91. The Commonwealth Bank also gained 3.2% to $24.85, while NAB gained 2% to $17.28. Wesfarmers shares dropped the most this morning, losing 7.9% to $15.50 after a trading halt last week.

Meanwhile, the International Monetary Fund has adjusted its forecasts for 2009 and it isn’t pretty, with its key global growth forecast falling from 2.2% to just 0.5%.

A G20 finance official says the revised outlook is due to worsening expectations of the US economy, which the IMF now expects to contract by 1.6% during the year. Growth for 2010 is now forecast at 3%.

Also overseas, Iceland’s government has collapsed after the global economic crisis sent the nation bankrupt last year. After talks to save the country’s government fell short, Prime Minister Geir Haarde handed his resignation to President Olafur Ragnar Grimsson.

Grimsson says it is unlikely a new government will be formed until next Tuesday, and that all workers in the current administration should continue their jobs.

Meanwhile, fast-food restaurant chain McDonald’s has recorded a positive quarterly profit, but has warned sales growth is likely to continue to fall in the coming months.

While McDonald’s recorded a 5.8% rise in December sales (in stores open at least 13 months), the growth rate has slowed from 7.7% in November and 8.2% in October.

The company’s fourth-quarter net profit fell 23% to $US985.3 million from $US1.27 billion a year ago.

Revenue also fell 3% to $US5.6 billion during the quarter, with the company blaming the stronger dollar in foreign markets such as Canada, Europe and Australia.

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