Shares rise strongly, ANZ cuts 500 jobs: Economy roundup

Local shares have surged more than 3% today after another good night on Wall Street. The Dow Jones Industrial Average jumped 3.46% overnight on the back of higher-than-expected February retail sales in the US and the fact that the General Electric credit rating was not cut as sharply as had been expected. Back […]

Patrick Stafford 13 March, 2009

Local shares have surged more than 3% today after another good night on Wall Street.

The Dow Jones Industrial Average jumped 3.46% overnight on the back of higher-than-expected February retail sales in the US and the fact that the General Electric credit rating was not cut as sharply as had been expected.

Back in Australia, the benchmark S&P/ASX200 index was up 101 points or 3.1% to 3336.5 at 12.15 AESDT. The Australian dollar also gained to US65 cents.

NAB shares have gained 4.4% to $17.47, Commonwealth Bank gained 3.9% to $29.80 while Westpac gained 2.8% to $17.06.

ANZ also rose 3.3% to $13.29 on news the bank will slash 500 jobs and move some overseas to India.

“In 2008, the size of the operation in Bangalore grew by around 500 people and it is reasonable to expect there will be some further growth in 2009,” an ANZ spokeswoman said in a statement, also confirming most of the jobs to be cut are in Melbourne.

The bank says all of its call centres will remain in Australia and New Zealand. The move follows another last year that saw 500 back-office jobs moved to India, and is separate from another decision made last December to slash 800 local jobs.

But investors in mining stocks were given cause for concern with a prediction investment in the Australian mining sector could dwindle to less than half its current size in two years.

BIS Shrapnel chief economist Frank Gelber has told The Australian that he predicts a 50% reduction in investment, and it may even fall to lower levels, blaming lack of capital and falling commodity prices, which look set to crash further in 2010.

Meanwhile, Minister for Communications Stephen Conroy has said the Government’s position on the $4.7 billion national broadband network remains unchanged.

Questions about the NBN were raised after Telstra announced this week it will upgrade its broadband network infrastructure to deliver faster speeds.

But Conroy has said that the plan to deliver fibre-to-the-node broadband will go ahead as planned, and the winner of the bidding process will be announced this month.

“We are aware how tight things are, but a viable project is a viable project,” he said. “The NBN is a piece of infrastructure that is beyond that one company. This is about the national interest.”