The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) closed up 35.7 points, to 4,140.8, a rise of 0.9%, the third day in a row of positive moves. Optimism that the US Federal Reserve will indicate more quantitative easing to stimulate the US economy appears to be the main driver today.
The RBA minutes released today show the central bank is upbeat about the economy and that previous interest rate cuts have helped to shelter the local economy from global issues. Retailers won't be too happy, as it appears likely there won't be an August interest rate cut. In potentially good news for resources companies, the RBA suggested that China's economy wasn't slowing as much as previously anticipated.
The Australian dollar jumped on the news, gaining half a cent against the US dollar, and is currently trading around 102.9 US cents.
Company news
According to a report in The Sydney Morning Herald, News Corporation's (ASX: NWS) Australian companies have successfully fought a decision by the Australian Tax Office to disallow $2 billion worth of currency exchange losses from 2001 and 2002. The ATO has been ordered to reassess the company's liability, and pay News Corporation's legal bill.
Fortescue Metals Group Limited (ASX: FMG) has met its target production of exporting more than 55 million tonnes of iron ore in the 12 months to June 2012, but costs on its expansion project have blown out by US$600 million, and the company could be forced to borrow up to US$1 billion to cover it. Fortescue's shares fell 2% to close at $4.54.
Rio Tinto Limited (ASX: RIO) produced 62 million tonnes of iron ore in the June quarter (including its joint venture partners), beating the first quarter result of 59 million tonnes, which was affected by cyclones. Analysts appear to have expected more, with the company's shares ending flat at $54.44.
Winners and losers
Newcrest Mining Limited (ASX: NCM) and Suncorp Group Limited (ASX: SUN) were the big winners today, with both stocks posting greater than 2% gains. Qantas Airways Limited (ASX: QAN) shares saw some sunlight, putting on 2 cents to close at $1.05.
BlueScope Steel Limited (ASX: BSL), Fortescue and Leighton Holdings Limited (ASX: LEI) were the big losers today, posting falls of 3.4%, 2.2% and 0.9% respectively.
Foolish takeaway
All eyes will be on Ben Bernanke and his address on the US economy tonight (our time). Given the sluggish growth in the US, investors will be hoping for news of further stimulus measures. As for Australia, we seem to be doing quite well.
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Motley Fool writer/analyst Mike King owns shares in Leightons. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
