The market rebounded today with the S&P-ASX200 index closing 1.2% higher at 6444.5 points while the All Ordinaries gained 74.4 points to 6507.2 on the back of expectations of a further interest rate cut in the United States next month.
Closer to home, BHP Billiton closed today’s session up A70c at $42.00, while its takeover target Rio Tinto gained $4.25 to close the day at $139.25.
The Rio bandwagon pulled into Australia today with chief executive Tom Albanese briefing local shareholders on the company’s rejection of BHP’s proposed three-for-one scrip deal, saying it undervalues the company.
Yesterday, BHP chief executive Marius Kloppers said the offer was “compelling” and wouldn't be drawn on the prospect of a higher bid.
But while Kloppers shied away from such comments, analysts at ABN said a higher bid from BHP was likely with the mining giant looking determined to get the deal over the line.
“The market is saying that three-for-one is not enough, and it is unlikely that BHP would come to the table with their best offer,” ABN says.
Meanwhile, metals on the London Metal Exchange bounced back, with zinc the star performer.
Three-month zinc jumped $US105 overnight to close at $2490 per tonne, however the metal is likely to encounter strong resistance at around the $2600/t mark if it continues its upward trajectory, Triland Metals told Dow Jones newswires.
The bulk of zinc plays on Final Call’ watch list followed suit with Oxiana adding A8c to close at $3.69, Kagara Zinc closing up 7c to $6.21 and Perilya jumping 19c to close at $2.97.
On the precious metal front, spot gold was last trading at $US803.70 per ounce, up $3.50 from closing price, on the back of modest gains in the crude oil price.
An unnamed Sydney-based trader told Dow Jones that the precious metal will be stuck in the range between $790-818/oz in the short-term as it looks for direction, which may come from US data this week.
“I think we're just stuck in that range until there's some more data,” he said.
Data to be released in the US today includes third quarter preliminary GDP figures, weekly jobless claims and October new homes sales.
Big movers on the Australian bourse today included InterMet Resources which soared A14c to an intraday high of 36c on high-grade rock chip results at its Paddy prospect within the Munderra project in north Queensland.
The stock cooled in afternoon trade, closing at 26c.
