Daily finance update

n Egypt’s President Mubarak
resigned on Friday, handing power to the
army, with the news sending US stocks
higher, but oil prices and the US dollar
lower.

n US consumer sentiment rose from
74.2 to 75.1 in February, but still below
forecasts for a result near 75.5. And the
US trade deficit widened from US$38.3bn
to US$40.6bn in January, just above
forecasts of US$40.4bn.

n European shares rose on Friday
in response to the news from Egypt and
higher corporate earnings from Swatch and
Alcatel. Shares in Nokia fell 14pct after
striking up a partnership deal with
Microsoft. The FTSEurofirst index rose by
0.4pct, with the UK FTSE up 0.7pct and
German Dax higher by 0.4pct.

n US sharemarkets rose on news
that Egypt’s President Mubarak had
resigned. At the close of trade, the Dow
Jones index was up 44pts or 0.4pct with
the S&P 500 up 0.6pct and the Nasdaq hit
3-year highs, up 19pts or 0.7pct. Over
the week the Dow Jones rose by 1.5pct
with the S&P up 1.4pct and Nasdaq lifted
by 1.5pct.

n US treasuries were mixed on
Friday as some investors weighed up
latest economic and geopolitical news
while others embraced long bonds with
yields at 10-mth highs. US 2yr yields
were largely steady at 0.84pct but US
10yr yields eased 6pts to 3.63pct. Over
the week US 2yr yields rose by 9pts but
US 10yr yields fell less than 1pt.

n The Euro and commodity
currencies rallied in afternoon US trade
following news that Egypt’s President
Mubarak has resigned. The Euro eased from
US$1.3580 to US$1.3500 before reversing
course to end US trade near US$1.3545.
The Aussie dollar rose from US99.55c to
US100.30c, weakened to US99.90c, before
reversing to US100.20c at the US close.
And the Japanese yen lifted from 83.65
yen per US dollar to around JPY83.30,
before weakening to JPY83.45 in late US
trade.

n US crude oil prices fell on news
that Egypt’s President Mubarak had
resigned. The Nymex crude oil contract
fell by US$1.15 (1.3pct) to US$85.58 a
barrel. But the expiring London Brent
crude rose by US56c to US$101.43 a
barrel. Over the week Nymex crude fell by
3.9pct while Brent rose by 1.6pct.

n Base metal prices were higher on
the London Metal Exchange on Friday, the
exception being aluminium, down 1.7pct.
Other metals rose between 0.3-1.9pct with
lead doing best. Over the week metals
eased by 0.3-2.7pct but after soaring
5-7pct in the previous week. But the gold
price eased on Friday as investors
trimmed demand for safe-haven assets. The
Comex gold futures price fell by US$2.10
an ounce to US$1,360.40. Gold rose by US
$11.40 an ounce (0.8pct) over the week.

n Ahead: In Australia, housing
finance and credit card data are
released. Leighton Holdings and Bendigo &
Adelaide Bank release earnings. Chinese
trade data is released. In the US, no
major economic data is scheduled.

Midday: Aus shares higher

The Australian share market is 0.4 per cent higher at noon, after Wall St closed marginally stronger following the Federal Reserve’s decision to stimulate the US economy. Locally the miners are leading gains, with BHP up on news the Canadian government has blocked its US$40 billion bid for PotashCorp.

The S&P/ASX200 index is up 21 points at 4,743 and on the futures market, the SPI200 is up 24.

In economic news: The ABS has shown the balance of goods and services in September was a surplus of $1.76 billion, down from $2.446 billion the month before. Retail trade for September increased 0.3 per cent to $20.509 billion, while over the September quarter retail sales increased by 0.7 per cent to $60.156 billion. The Federal Chamber of Automotive Industries (FCAI) has revealed monthly car sales for October didn’t change much in the month, up 0.1 per cent.

To company news: Shares in Austal Ltd (ASX:ASB) soared today, prior to its trading halt, following news the US Navy is in talks with the ship manufacturer. Austal says the trading halt is necessary, pending the release of an announcement regarding the Littoral Combat Ship tender with the US Navy. The US Navy is believed to also be in talks with another party for the tender. Shares in Austal climbed 18.47% to be $2.95 before entering into a trading halt.

Leighton Holdings Ltd (ASX:LEI) says its disappointing first quarter result has been impacted by problems associated with the Brisbane Airport Link project. The confirmation came at the company’s annual general meeting where chairman David Mortimer revealed Leighton’s profit had fallen $85 million in the first three months of the current financial year. Leighton’s unaudited reported profit after tax for the quarter is therefore $48 million compared to $131 million reported last year. Shares in Leighton Holdings have fallen 0.39% to be $32.97 at noon.

Turning now to market indices: The best performing sector is Materials, with the index up 171 points to 13,501. Shares in Atlas Iron are up 5.08% at $2.69. Shares in Alumina and BHP are also higher. The worst performing sector at midday is Financials Excluding Real Estate Investment Trusts, with the index down 22 points to 5,190. Shares in AXA Asia Pacific Holdings are down 1.64% at $5.41. Shares in ASX and Macquarie Group are also lower at midday.

To New Zealand now, the NZSX50 is 4 points lower. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand is at the top of the list with stock up 1.46% at $2.09 followed by; Fisher and Paykel Healthcare, Westpac and Sky City Entertainment Group.

To gold and the dollar: Gold is trading at $1348 US an ounce and the Aussie dollar is trading at just over one US dollar.