Australian Share Market Positive Start to 2012

Attention businesses using Australia accounting software!

The Australian share market has seen a rise on the first day of trading in 2012, with more than one per cent rise on the back of positive leads in the local bourse, boosted by the European stock markets and the rallying in commodity prices during the long weekend in Australia.

For the first time in a week, the Australian shares have risen as the materials sector led broad-based gains after the official positive manufacturing PMI data out of China for December beat market expectations, helping boost risk appetite, helping resources, and energy stocks.


Gains on shares were posted across the market after the better-than-expected German manufacturing data helped European markets spread more holiday cheer, though the volumes remained low.

Also cited as positive factors by traders were the hopes of policy easing in China and a slight calming of European jitters  although in the week ahead, the market is expected to face several major events.

A rise of 1.1 per cent to 3.7 per cent was seen on shares of BHP Billiton, Rio Tinto, Newcrest Mining, and Fortescue Metals after China's PMI rose to 50.3 against the 49.0 expected by economists.

Moreover, an increase of 0.8 per cent to1.7 per cent was seen on major banks, which is said to have been helped by an improved risk appetite after Europe's STOXX 600 has increased by 1.1 per cent and Germany's DAX advanced 3 per cent.

According to Dow Jones Newswires technical analysis, the S&P/ASX 200 index looks poised to rally to the 4200-4270 area this week.

The benchmark S&P/ASX 200 index closed up 1.1 per cent at 4101.2 after hitting a three-day high of 4108.1 intraday.

Meanwhile, the Australian dollar has made a positive start to 2012 as it posted a record high against the euro and touching a one-month peak against the US dollar as positive manufacturing data from China boosted investor sentiment.

At 5.00pm AEST, the Australian dollar was seen trading at 102.90 US cents, which is up 1.3 per cent from Friday's local close of 101.62 US cents.

According to Iress data, during the day, there was a currency movement between 102.17 US cents and 102.99 US cents.

Aussie Cities Among The Priciest In The World

According to a global survey, Sydney, Melbourne, Perth, and Brisbane have gained the newest reputation of being among the most expensive cities in the world because of its strong Aussie dollar.

The Economist Intelligence Unit’s Worldwide Cost of Living survey found that it is now cheaper living in London, Hong Kong, Vienna, Rome, Berlin, and Beijing compared to most Australian cities.

From ranking 32nd in the last two years, Sydney is now the 6th priciest city in the world. Melbourne, on the other hand, moved from 38th place to 7th this year.

Ranking 13th and 14th, respectively, are Perth and Brisbane. This data show that the two cities are almost 25 per cent more expensive than New York.

The strengthening value of the Aussie dollar is partly the culprit of the skyrocketing costs of living of Australia, according to Jon Copestake who authored the survey.

In November 2010, the Australian dollar reached parity with the US dollar. And on May 3, it even hit a peak 110.11 US cents which was the highest since 1983. Today, the Aussie dollar is closing in at 107 US cents.

“Rising domestic prices, partly due to rising oil and commodity prices, have been compounded by the strength of the Australian dollar, which achieved parity with the US dollar earlier this year, compared to being worth around half that much 10 years ago,” said Copestake.

The survey further revealed that Australian cities are also among the most expensive cities for business trips.

Accommodation, meals, taxis, drinks, and a newspaper in Melbourne would cost one around US$760 a day. While in Sydney, it costs around US$627.

“Australia has long been an attractive destination, with Melbourne and Sydney becoming international cities in their own right. Whether the spiralling relative cost of living will dampen this appeal remains to be seen,” he added.

The cities of Tokyo, Osaka, and Oslo were named the three most expensive cities in the world by the survey. On the other hand, Mumbai, Tunis, and Karachi are the cheapest among the countries that were surveyed. There was a total of 140 countries included in the survey.

The Economist Intelligence Unit is UK-based and provides economic and business research, as well as forecasting and analysis.

Source: The Sydney Morning Herald »