Shares open higher, Gillard says Labor must change: Midday Roundup

The Australian sharemarket has opened nearly 2% higher this morning after a positive lead from Wall Street, as investors become more optimistic about the sovereign debt situation in Europe.

The benchmark S&P/ASX200 index was up 76 points or 1.88% to 4148.3 at 12.00 AEST, while the Australian dollar rose to $US1.03c.

AMP shares rose 2.53% this morning to $4.06, while Commonwealth Bank shares rose 2.19% to $45.74. Westpac rose 2.99% to $19.99, while NAB gained 2.91% to $22.98.

In the United States, the Dow Jones Industrial Average rose 186 points or 1.66% to 11,433.

Gillard says Labor must change

Prime Minister Julia Gillard has said in a speech at Old Parliament House that left-wing parties are now facing trouble, not just in Australia but around the world.

“We meet in difficult days for social democracy – at home and around the world,” she said, noting losses in Western Australia, New South Wales and Victoria for the party.

“I am here today to say to you, that fashionable thinking is a mistake – indeed a grave error,” she said. “For a long period of time, Labor believed in the one-size-should-fit-all service provision and those seeking choice were undermining collective aspiration.”

“Now we understand that desire for choice is rightly strengthening – not abating… In this age we need to pursue our historic mission while also embracing choice and creating ways to give individuals more control.”

US dollar pledge bolsters sharemarkets

Central banks have agreed to lend US dollars to banks in the Eurozone in order to avoid a crisis, they have announced.

“The governing council of the European Central Bank (ECB) has decided, in co-ordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year,” the ECB said in a statement.

The move comes as global markets have plummeted over the past few weeks as investors become nervous over how widespread the European debt crisis could become.

New South Wales defends infrastructure planning

New South Wales premier Barry O’Farrell has defended his government’s infrastructure agenda, responding to comments made by Infrastructure New South Wales chair Nick Greiner.

“We’ll do what we said we’ll do before the election,” O’Farrell told ABC Radio.

“Which is an independent inquiry not just into the (partial) sale of the state’s electricity assets by the Labor Party but to get advice for what is the best way forward for the state’s electricity assets that will keep power prices low.”

News Limited has reported comments from Greiner suggesting he is eager to see infrastructure spending advance quicker.

Research in Motion results disappoint

Shares in BlackBerry maker Research In Motion have fallen after the troubled company released results that were worse than expected.

Shares plummeted 15% to $US27.99 after the results were made.

RIM announced net profit of $US329 million in the second quarter, down from $US797 million in the previous corresponding period. Revenue fell to $US4.2 billion from $US4.6 billion in the same amount of time.

While the company announced 10.6 million smartphone shipments, and 200,000 shipments of its PlayBook tablet, analysts had expected 11.9 million and 700,000, respectively.

“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models,” Jim Balsillie, co-chief executive, said in a statement.