Euro plan pushes shares up one per cent

THE Australian sharemarket has opened up more than one per cent off the back of strong performances in overseas markets overnight. The announcement that European leaders had agreed on a plan to reduce Greece's debt and provide it with more rescue loans fuelled global market growth yesterday and pushed the Australian market up 2.5 per cent in two hours of trade. IG Markets market analyst Cameron Peacock said the European plan had arrested systemic risk. "What we saw last night was a bit of a relief rally," he said. He predicted the market would finish strong today and continue to build for the rest of the year. "We're still going to see a bit of volatility, but based on the price action last night, most of the indices have broken out of the two-month pattern." Until yesterday's announcement, the market had been in a holding pattern. Mr Peacock said the foundations now had been laid for the Australian share market to trade higher for the rest of the year. A better-than-expected US gross domestic product (GDP) figure had also helped dispel fears the US was heading into another recession, Mr Peacock said. At 10.42am (AEDT) today, the benchmark S&P/ASX200 index was up 59.8 points, or 1.38 per cent, at 4408, while the broader All Ordinaries index was up 59 points, or 1.34 per cent, stronger at 4462.9. The December share price index futures contract was up 51 points at 4409 with 16,182 contracts traded. All the local banks were up. Westpac rose 52 cents to $23.28, Commonwealth Bank increased 98 cents to $50.97, ANZ gained 41 cents to $22.41 and National Australia Bank was up 48 cents at $26.35. Making news, Qantas Airways Ltd and Cougar Energy Ltd hold their annual general meetings today. The Qantas AGM is expected to be fiery with the airline embroiled in industrial disquiet on several fronts. The airline says the industrial action taken by the licensed engineers', pilots' and Transport Workers' unions has cost it $68 million. Qantas opened the day up two cents, or 0.96 per cent, to $1.59. Meanwhile, Macquarie Group has downgraded its 2012 forecast after financial market volatility and uncertainty led to reduced income and a 24 per cent fall in first half profit. Its share price this morning had risen $1.15, or 4.7 per cent, to $25.49.