Shares gain ground, Bank of Queensland profit slump, Japan stimulus talks: Economy roundup

The Australian sharemarket has opened 1.1% higher today after overseas markets were buoyed by news that the US Government will help life insurers.

The Dow Jones Industrial Average gained 0.61% on the news of the rescue plans, while in Australia the benchmark S&P/ASX200 index was up 27.1 points or 0.75% to 3646.6 at 11.42 AEST.

The Australian dollar also managed to rise just above US71 cents.

ANZ shares gained 0.6% to $16.40, while Commonwealth Bank gained 1.6% to $35.44. Westpac also gained 0.6% to $20.14 as NAB fell 1.1% to $21.79.

But Bank of Queensland shares fell 4.3% to $833 after the company slashed its interim dividend after its first half net profit dropped by 25%.

The lender recorded profit for the six months to 28 February of $46.3 million, down from $61.7 million in the previous corresponding half.

“As flagged last October and again in February, increased funding costs continue to compress our net interest margins,” managing director David Liddy told Reuters.

But Liddy has given investors some hope, claiming “signs of this recovery have already become evident in recent weeks”.

Australian consumers’ unemployment expectations recorded a second consecutive fall in April, according to Westpac. The unemployment expectations index dropped 3.6% in April to 175.27, after a 0.7% fall in the previous month.

The news comes after the announcement today that Australia’s unemployment rate has risen to a higher than expected 5.7%.

The Federal Government’s national broadband network plans have been given a glimmer of hope after Nationals Senator Barnaby Joyce said it will likely pass through Parliament.

While Joyce said the $43 billion plan is expensive and that he will pursue changes, he believes Parliament will back the plan.

“My first choice of action would be to try and stop it so we don’t get ourselves into an outrageous amount of debt, but I’ll have to be a realist. That is not going to happen,” Joyce told ABC Radio.

“The Greens will dance around the edges and say yes, and the independents will end up saying yes, so it will go through,” he said.

In Japan, the country’s ruling parties are now in final talks regarding another stimulus package worth about $US150 billion as the nation deals with a recession led by falling export levels.

Australia’s second biggest trading partner will add ¥12 trillion to the package, bringing its total to about 4% of GDP. The package will include measures for corporate financing and spending for solar power systems.