shares to surge on bhp, rio
Shares to surge on BHP, Rio By Kevin Andrusiak 27jan06
SHARE market watchers are predicting a bumper close to the trading week following a lay-off yesterday because of the Australia Day public holiday.
The benchmark S&P/ASX 200 index will start today at 4861.4, seven points up for the week. But outstanding gains on overseas markets for heavyweight miners Rio Tinto (rio.ASX:Quote,News) and BHP Billiton (bhp.ASX:Quote,News) have given traders plenty of reason to suggest today's session will be positive.
Market mood towards those two stocks in particular is often the best indicator of how the local exchange will perform.
BHP Billiton was up 4.8 per cent in London and up 3.8 per cent on Wall Street during Wednesday trading.
Rio Tinto was up 4 per cent in London trade on the same day.
The pair are being powered by a surge in commodity prices, particularly for copper and zinc.
Copper futures in China trade are at a record on expectations of demand from Chinese users.
ING Wholesale Banking has raised its forecasts for zinc, copper and aluminium, arguing prices will continue to improve because of global growth.
The Sydney Futures Exchange's share price index, which opened at 5.10pm yesterday, shot to a record of 4873 just after opening.
Key Asian markets also outperformed yesterday, moving higher as the oil price continues to slide.
Oil futures for March delivery fell US25c to $US65.20 a barrel.
The Japanese Nikkei 225 rose 1.18 per cent to 15,834.64. In South Korea, the Kospi index reversed early loses to post a small gain and Taiwan's Weighted Index improved 1.24 per cent to 6532.18.
CommSec chief equities economist Craig James said investors were moving in line with what was expected from the reporting season, starting in earnest from February 1.
"Mining and energy companies should generally post stellar results, riding on the back of buoyant global demand and historically high commodity prices," he said. "But while revenues should be decidedly healthy, there is the potential for some disappointment on the cost side of the equation.
"Patchy results are expected from retailing."
BHP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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