GDP grows by 1.3% last quarter: Midday roundup

Australia’s gross domestic product grew by1.3% last quarter, bringing the total to 4.3% for the year from March 2011 to March 2012.

The result far exceeded economists’ modest expectations of a 0.6% growth figure, with a 3.3% annual rise. The boost was due to a surprise rise in household spending and an increase in non-residential construction.

The announcement caused a jump in the Aussie dollar, which went up by over half a cent to US 98.3 cents.

Strong opening for Australian stock market

The Australian stock market has opened strongly again, following gains yesterday which put it back above the key 4,000 point level. The rise came on the back of moderate gains on Wall Street last night and a meeting of the G7 in their latest attempt to fix the European crisis.

At the official market open, the benchmark S&P/ASX 200 index gained 0.29% to 4,055.5 points, while the All Ordinaries Index also rose a modest 0.29% to 4,104.5 points.

Ten turns to capital raising

The Ten Network is raising $200 million to strengthen its balance sheet through the offer of new shares to existing shareholders.

The fund raising is an important step in the broadcaster’s turnaround strategy, chairman Lachlan Murdoch says.

“Given the uncertain revenue environment and our strategy of investing in programming renewal, the board felt it was important to strengthen our balance sheet at this time,” he said in a statement today.

Ten will offer its shareholders three new shares for every eight held, at a price of 51 cents each.

Ten’s shares are in a trading halt to allow for the capital raising and last traded at 64 cents.

Dollar continues to rise

The Australian dollar has risen again on the back of an unexpectedly positive GDP announcement and the interest rate cut delivered yesterday by the Reserve Bank.

Despite dropping last night, it recovered ground this morning before jumping half a cent at 11.25am AEST. The dollar was trading at US 98.27 cents at 12pm AEST.

Andrew Salter of ANZ Research says that the dollar’s steady drop over the last few months may have levelled off.

“We… are becoming more convinced that, in the absence of a systemic event out of Europe, the base around 95.75 will hold over the next few weeks.”