Shares flat, Rudd avoids Chinese spying controversy: Economy roundup

The Australian share market has opened higher today after slight gains on Wall Street overnight.

The benchmark S&P/ASX200 index was up 9.8 points or 0.3% to 3773.1 at 12.15 AEST. The Australian dollar also remained steady at US78c.

AMP shares gained 2.2% to $4.68, while NAB lost 0.1% to $22.04. ANZ gained 0.3% to $15.90 as Westpac lost 0.5% to $19.06.

Rudd begs off on Stern case

Prime Minister Kevin Rudd has said the Government will not intervene in the case of an Australian Rio Tinto executive detained in China, on espionage suspicions.

Stern Hu, the general manager of Rio’s Chinese iron ore business, was arrested on Sunday night. Rudd told ABC Radio on Friday that calls from opposition leader Malcolm Turnbull to intervene exposed a “lack of judgment”.

“This is not the time for sensationalist, domestic political point scoring,” he said. “As we’ve done with many consular cases before… we’ll make all representations at what levels are necessary.”

Meanwhile, US president Barack Obama has supported Rudd’s launch of the Global Carbon Capture and Storage Institute after climate change talks with world leaders in Italy.

Obama told reporters at a joint press conference with Rudd that the talks had resolved to help spur the innovation and development of clean carbon technology.

“Our goal is to double the research and development investment we need to bring these technologies to market to achieve our long-term energy and emissions goals,” Obama said. “A number of countries have already agreed to take the lead on developing particular technologies, including solar.”

Reserve currency overhaul recommended

Also in Italy, Chinese State Councilor Dai Bingguo has called for a revision of the world’s reserve currency system.

“We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies’ exchange rates and promote a diversified and rational international reserve currency system,” Dai said.

In the US, Wall Street recorded gains as investors moved towards cheap technology stocks. The Dow Jones Industrial Average gained 4.76 points or 0.06% to 8183.17.

Also in New York, Citigroup announced that it has replaced its chief financial officer and introduced a new banking chief, as the Government prepares to take a 34% equity stake in the company.

Citigroup controller and chief accounting officer John Gerspach will become the new chief financial officer, while former Freddie Mac chief operating officer Eugene McQuade has taken the chief executive role.

GM prepares to exit bankruptcy

Meanwhile, troubled automaker GM is preparing to announce its emergence from bankruptcy after a 40-day reorganisational period led by the US Government.

A court order that will allow GM’s assets to be sold to a new company that is more than 60% owned by the US Department of Treasury took effect yesterday, with the move completing an effort to save the company from liquidation.