Market reaches new high for 2009, Building approvals climb: Economy round up

The Australian share market has reached a new record for the year this morning, despite a tumultuous day in US markets due to automaker GM declaring bankruptcy.

The benchmark S&P/ASX200 index was up 67.1 points or 1.72% to 3,961.5 at 11.41 AEST – the highest point since the start of the year. The Australian dollar has also reached its own eight-month high of 81 US cents.

AMP shares have gained 2.5% to $4.97 as Commonwealth Bank gained 0.2% to $36.22. ANZ lost 0.7% to $16.08 while NAB gained 1.1% to $22.76.

The country’s largest investment bank, Macquarie Group, said in a statement it is not aware of any reason for its unexpected share rise of 11.8% to $35.39 yesterday.

“The company is not aware of any information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the company,” the company said in a statement to the ASX. It maintained that it has complied with all regulations.

More good news for the housing market was announced today, with the seasonally adjusted estimate of total dwelling approvals rising 5.1% to 11,402 during April, according to the Australian Bureau of Statistics.

The new figures show that approvals for private homes rose by 7.2%, the fourth rise in as many months, but approvals for other private dwellings dropped by 1.4%.

The seasonally adjusted estimate of the value of total buildings approved falling 1.9%. The value of non-residential buildings approved fell by a massive 8.6%, but the value of residential buildings rising 1.7%.

Overseas, US President Barack Obama said that General Motors will survive bankruptcy and that the Government is hesitantly accepting its controlling shareholder position.

“Our goal is to get GM back on its feet, take a hands-off approach and get out quickly,” Obama said.

A new task force comprised of White House and Treasury officials will oversee the restructuring of both GM and Chrysler, with the force saying the bankruptcy should take up to 90 days to complete.

Wall Street recorded gains despite the announcement, with new economic data showing slower declines in the manufacturing industry buoying up the markets.

The Dow Jones Industrial Average gained 221.11 points or 2.6% to 8,721.44, with the S&P 500 index gaining 23.73 points or 2.58% to a seven-month high of 942.87.

Back home, GM Holden general manager Mark Reuss told the Nine Network that the future of the company remains strong despite its parent filing for bankruptcy.

“We have worked over the last 18 months and taken all the necessary steps in the global financial crisis to make sure Holden here in Australia is cash-flow positive, is viable and has a great revenue stream set up for our new products that we’re beginning to introduce,” he said.

Meanwhile in Queensland, several unions have said that a debate will rage after it was told the State Government will sell large parts of the state’s rail network, the Port of Brisbane, forestry interests and the Gateway motorway.

Queensland Council of Unions general secretary Ron Monaghan said there has not been enough discussion on the issue.

“We are in dispute with the Bligh Government over this issue,” he told AAP. “There will be an ALP conference on the weekend. I think they’ll make a decision on this which will say that public assets of Queensland should stay in Queensland hands. We weren’t ready for the scale of this announcement.”