Australian market calms after ratings cut shock

The dollar was trading at around half a US cent lower at noon, as news of America's credit rating downgrade caused traders to take less risky investments.

AEST today, the Australian dollar was trading at 103.94 US cents, down from 104.42 cents on Friday.

Standard and Poor's says its downgrading of the US credit rating will have no immediate impact on Asia-Pacific sovereign ratings, but could have negative consequences over the long-term.

S&P says the downgrade, together with weakening sovereign creditworthiness in Europe, points to an increasingly uncertain and challenging environment ahead.

The share market had clawed back some losses at noon.

AEST, the benchmark S&P/ASX200 index was down 32.6 points, or 0.79 per cent, at 4,072.8 points, while the broader All Ordinaries index had backtracked 24.6 points, or 0.59 per cent, to 4,145.1 points.

On the ASX 24, the September share price index futures contract was down 17 points at 4,033 points with 48,575 contracts traded.

CommSec market analyst Juliette Saly said the domestic share market reacted with shock to US government debt being downgraded by ratings agency Standard and Poor's from AAA to AA+.

Following the huge losses on global sharemarkets last week amid concern about the strength of the US economic recovery and debt problems in Europe, interest rate futures today point to a rate cut in September.

Across the region, Japan's Nikkei 225 index was off 1.1 per cent in recent trade while New Zealand's top 50 index was off 3 per cent.

Hopes for a bounce on the local sharemarket after the Friday's horror were dashed after Standard and Poor's downgraded United States government debt from AAA to AA+, largely because of the failure of US leaders to reach a consensus on containing the country's spiralling debt.

But Treasurer Wayne Swan said Australia’s economy was in good shape and could cope with the worst the world can throw at it.

‘‘There is not a G20 finance minister who wouldn’t swap places with me in the environment we are in at the moment,’’ he said this morning.

Mr Swan said it was too early make a judgment that the world was facing a second financial crisis. ‘‘We will cross that bridge if we come to it."

Some opportunities seen

CommSec market analyst Juliette Saly said the domestic share market reacted with shock to US government debt being downgraded.

‘‘But investors seem to have calmed down a bit this morning after we saw an initial sellout,’’ Ms Saly said.

Gold stocks fared well after the price of the precious metal hit a new record high of $US1699.70 per ounce, up from $US1651.80 on Friday.

Among gold producers, AngloGold Ashanti was up 9 cents, or 1.1 per cent, at $8.03, Eldorado Gold Corp had added 37 cents, or 2.2 per cent, to $16.97 and Newcrest was 20 cents firmer at $39.40.

Ms Saly said positive corporate news helped to boost the market. Bendigo and Adelaide Bank reported a 41 per cent increase in full year net profit to $342.1 million, but said it expects the market to remain volatile in the period ahead. Shares in the bank were up 9 cents, or 1.12 per cent, at $8.16.

While JB Hi-Fi posted a fall in 2010-11 net profit to $109.70 million, from $118.65 million for the previous financial year, it revealed plans to expand.

‘‘It’s going to open 16 new stores across 2012 and also the dividend they paid to shareholders looked okay, so JB Hi-Fi is bucking the trend in the retail space,’’ Ms Saly said.

JB Hi-Fi shares were up 12 cents at $14.47.

High Court puts Malaysia deal on hold

HIGH Court judge has halted today's first scheduled transfer of asylum seekers from Christmas Island to Malaysia under the Gillard government's controversial refugee swap deal.

The first group of 16 men was due to be flown from the island at 11.30am AEST (8.30am local time), escorted by Australian Federal Police.

But Justice Kenneth Hayne ordered last night that the charter flight not depart before 4.15pm, pending the hearing of another application in the High Court in Canberra at 2.15pm.

The injunction, sought by lawyer David Manne from the Refugee and Immigration Legal Centre in Melbourne, was granted at a special hearing of the High Court in Melbourne last night.

Mr Manne said last night the High Court challenge on behalf of 42 asylum seekers involved fundamental human rights protection. He said six of his clients were unaccompanied minors.

''The minister, as legal guardian, must act in the best interests of these children,'' he said.

Mr Manne said the injunction dealt with "life and death matters" and the deportation of unaccompanied minors could mean Immigration Minister Chris Bowen was abandoning his responsibilities to ensure their safety and welfare.

"Malaysia has a long-standing record of very serious mistreatment of asylum seekers and refugees - arbitrary arrest, arbitrary detention, arbitrary beatings, whippings, canings and even deportation," he said.

The dramatic last-minute stay comes after a second boatload of asylum seekers arrived at Christmas Island.

There are now 105 asylum seekers on the island subject to expulsion under the people swap deal, in which 800 boat people will be sent to Malaysia in exchange for 4000 declared refugees.

The 50 new arrivals are mostly Afghans and include five males who say they are under 18 and one woman.

They were told of their impending deportation as detainees entered the third day of a hunger strike.

Guards said many of the group had been banging their heads against walls as well as refusing food, water and medical attention.

They include a group of men who were due to be deported today.

The aircraft that will take them has been under 24-hour guard due to concerns it could be sabotaged, while AFP officers have been boosted to 109.

While the department said late on Friday it had no knowledge of a hunger strike, it has since acknowledged some people are not eating. A small number had now missed consecutive meals.

"We are treating their welfare as a high priority and detention services provider Serco is continuing to engage with those involved and encouraging them to eat and drink," an Immigration spokeswoman said. She added the hunger strike "will have no effect on their situation.

We warned Tottenham situation could get out of control:community leaders

LONDON — As London surveyed the damage Sunday in the hours after a small anti-police demonstration in a north London neighborhood spiraled into looting and violent clashes that left 26 police officers injured and led to 55 arrests, many sought to cast the blame wider than the rioters themselves.

In Tottenham, the center of the rioting, residents spoke of twin perils that had converged to leave their streets scarred and smoldering Sunday.

Frustration in this impoverished neighborhood, as with many others in Britain, has mounted as the government’s austerity budget has forced deep cuts in services and aid. At the same time, a widely held disdain for law enforcement here, where a large Afro-Caribbean population has felt singled out by the police for abuse, has only intensified through the drumbeat of scandal that has wracked Scotland Yard in recent weeks and led to the resignation of the force’s two top commanders.

The riot was the latest in what has turned out to be a season of unrest in Britain, with multiple demonstrations escalating into violence in recent months. And there was not long to wait until a new one broke out: on Sunday night, in the northern borough of Enfield, the police were out in force to crack down on looters amid a demonstration hastily organized on Twitter posts, the police said in a statement.

The incident in Tottenham began as a small and peaceful march, in which residents gathered outside a police station to protest the killing of a local man, Mark Duggan, in shooting by police officers last week. Scotland Yard has said that Mr. Duggan, who was riding in a taxi at the time of the shooting, was the subject of a “pre-planned operation” by officers. The policemen involved in the incident have been quoted in newspapers as saying that they had come under fire, which slightly wounded one of the officers, before they began to shoot.

There were also claims that police were warned on Thursday evening and Friday morning by people with knowledge of Tottenham that there could be "significant" community reaction to Duggan's death.

Duggan's fiancee, Semone Wilson, 29, said the family had not wanted trouble, only answers. "When we were outside the police station last night we wanted someone to come out. We want some answers. I have not even told my children that he is dead because we cannot give them any answers."

Of the violence, Wilson said: "I am not happy about what has happened. We didn't want this trouble. We wanted some answers."

Shaun Hall, Duggan's older brother, said the family was "not condoning any kind of actions like that at all, or for this [action] to be taken in my brother's name". He appealed to people in the community who were frustrated and angry to "try and hold it down".

The family were "devastated" at his death, with "the most gruelling" thing for Duggan's parents being that nobody had officially informed them what had happened. He dismissed allegations that Duggan had shot at police as "rubbish".

The IPCC commissioner Rachel Cerfontyne met family members after accusations that they had been left unsupported and isolated since Thursday's shooting.

While Cerfontyne, who is running the independent investigation, is not thought to have met the family until Sunday, the IPCC – faced with criticism from the family – said it had been in regular contact.

Forensic examiners were slowly and painstakingly working their way through the crime scene as part of the police investigation. Officers from the homicide and serious crime command and specialist investigators from the public order branch were reviewing CCTV footage and taking witness statements.

Extra police deployed across London tonight

LONDON: London braced on Sunday for more violence after some of the worst riots in the British capital for years which politicians and police blamed on criminal thugs but residents attributed to local tensions and anger over hardship.

Rioters throwing petrol bombs rampaged overnight through the deprived district of Tottenham in north London, setting police patrol cars, buildings and a double-decker bus on fire.

"There is Twitter conversations that people are being asked to meet again down in Tottenham, so we are all concerned but clearly we will be much better prepared this evening," Richard Barnes, London's Deputy Mayor, told BBC TV.

Additional officers are on duty in Tottenham and cordons remain in place around Tottenham High Road.

Further rioting has already spread to Enfield Town, with some 200 people clashing with riot police. A police car has been trashed and shop windows smashed.

Commander Christine Jones said: “We do have extra resources out tonight on duty across the capital.

"We are carefully monitoring any intelligence and ensuring we have our resources in the right places. No one wants to see a repeat of the scenes that we witnessed last night in Tottenham.

“Our investigation team is continuing its work and those people responsible for the violence, disorder and crime we saw last night will be identified. Anyone else who thinks they can use the events from last night as an excuse to commit crime will be met by a robust response from us."London Police"

Tottenham: echoes of a history not forgotten as rioting returns

Clashes between police and rioters are taking place in Enfield Town this evening (Sunday), indicating that civic unrest is spreading after violent disorder in Tottenham last night.

Reports from the scene say up to 30 people, many of them young and wearing hooded clothes, have been pushed back from Enfield Town centre by police during a confrontation.

A police car was attacked and badly damaged, while shops came under attack from bricks and slabs of concrete, say as-yet unconfirmed eye-witness reports.

A strong police presence, including the riot squad clad in black, is bidding to protect the town centre from the mob.

Enfield borough borders Haringey, where rioting and looting took place last night. Enfield Town centre is easily accessible by train from Tottenham.

The allegations and counter-allegations of teenagers and the authorities about heavy-handed or incompetent policing are also reminiscent of 30 years ago.

The sequence of events in Tottenham at the weekend has many echoes of the Toxteth riots in Liverpool of 1981, as well as unrest in Tottenham itself in 1985 and other incidents of unrest that decade: a local flashpoint in a deprived urban area, the rapid escalation of a local protest into mayhem as others pile into the area – and long summer nights.

The television producer and commentator David Akinsanya was in Tottenham in the early hours of Sunday morning. He also covered some of the 1980s riots as a reporter. He said: "There are and there aren't similarities between what happened and earlier riots. In those days as a black youth you could be walking down the street, the police would bundle you into a van and nobody would see you for three days. That doesn't happen now. The black community is asking the police to get on top of gun crime, that's another change.

"But there are still many issues about policing in the area, and there are still good kids walking around Tottenham with their hoods up, trying to hide themselves away because they get endless grief from the police."

He added: "The other thing that's the same is the weather. If it had poured down they would all have gone home. We were actually saying earlier, before we knew anything about what was happening, that it was a nice night for a riot."

At least the trouble in Tottenham has not, so far, approached the scale of the worst incidents of the 1980s when thousands were injured, thousands more arrested and millions of pounds worth of damage caused.

In 1981 Toxteth saw some of the worst rioting in Britain. It began when police pursued a man into the area, wrongly suspecting that he had stolen a motorbike. A second man, Leroy Cooper, a photography student who had been at a youth club, intervened and was in turn arrested for assault. That night police were attacked by youths with petrol bombs and paving stones, and in the days and nights that followed more than 500 people were arrested in pitched battles, 470 police officers were injured and 70 buildings were burned down or demolished, including the 150-year-old Raquet Club, a survivor from the district's affluent Victorian heyday, and the famous Rialto Ballroom where the Beatles had played.

After four nights of violence the city's Protestant and Catholic bishops, David Shephard and Derek Worlock, united to appeal for peace and the archbishop of Canterbury, Robert Runcie, expressed concern. On 8 July the home secretary William Whitelaw agreed to a request from the Liverpool chief constable that 25 rounds of CS gas should be fired into the crowd by police, its first use on the UK mainland.

Weeks later the battles were over but trouble was still flaring up. On 28 July – the night before the wedding of Prince Charles and Diana – David Moore, who had a bad limp from an earlier car accident, was walking home from visiting friends in Toxteth. He was unable to move fast enough to get out of the way of a police car speeding across waste ground to break up a group of youths. He was hit, and died. More violence on the streets followed. After an investigation by another police force two officers were charged with manslaughter the year after, but acquitted.

Cooper pleaded guilty on legal advice and spent nine months in borstal. This summer he told the Liverpool Daily Post that when he left borstal the area still looked like a war zone. "The riot was a symptom of there being something really wrong with our society," he said. "We smashed our own community up, we destroyed our own homes. There had to be something wrong."

Earlier in 1981 in Brixton, where trouble was sparked when police stopped a young black man who been stabbed but who others thought was being arrested, more than 300 police and civilians were injured. Scores of vehicles and 83 buildings were burned, damaged or looted.

In Handsworth, Birmingham, in 1985, where there had also been trouble in 1981 and would be again in 1991 and 2005, two days and nights of looting and arson followed the arrest of a man. Two brothers died as the post office they ran went up in flames, 35 people were injured and more than 40 shops were destroyed or looted. The local artist and photographer Pogus Caesar told the BBC in 2010, when his images of the riots were exhibited to mark the anniversary: "The scars of 1985 will never heal completely but people of Handsworth are strong, they are resilient. The candles are burning slowly but the flame is bright."

And of course there was Tottenham. In October 1985 the Broadwater Farm estate was the scene of one of the most notorious and chilling incidents, when PC Keith Blakelock was murdered in rioting that followed the death of a local woman, Cynthia Jarrett, who had collapsed during a police raid on her home after her son was arrested. Three local men including Winston Silcott were jailed for the murder but cleared on appeal four years later. Two officers were later cleared at the Old Bailey of fabricating evidence.

In Liverpool 30 years after the riots people still feel aftershocks of the nine nights of street fights, arson, vandalism and looting. The anniversary has been marked by a book and an exhibition at the museum of Liverpool.

The riots led to a reappraisal of policing in black communities, race relations policy in general and the urgent need for regeneration in Britain's post-industrial rundown inner cities.

Lord Gifford's report found that racial discrimination had been "uniquely horrific" in Liverpool. Lord Scarman's report, after the Brixton riots, urged positive discrimination to tackle the problems facing the black community.

Twenty years later, in 2001, many of the same points were made again in official reports on summer riots in Bradford, Oldham and Burnley. The Cantle report, commissioned by the Home Office, found that many lived "parallel lives", never mixing with people from different backgrounds.

It also warned that some regeneration schemes had actually made the situation worse, forcing different communities to compete against each other, breeding resentment and anger.

Riots of the 1980s

• St Pauls, Bristol, April 1980: Sparked by a police raid on the Black and White Café. In the day and night of rioting there were 130 arrests, 19 police were injured, and fire engines and 12 police cars were hit

• Brixton, London, April 1981: People allegedly believed a stabbed youth died through police brutality. Over two nights almost 150 buildings and more than 100 vehicles were damaged. At least 65 citizens and 299 police were injured. The damage was put at £7.5m

• Toxteth, Liverpool, July 1981: Began with the arrest of Leroy Cooper, 20. Over nine days in which CS gas was used by police for the first time on the UK mainland, a man died, knocked down by a police vehicle, 500 people were arrested, 468 police were hurt

• Handsworth, September 1985: Sparked by another arrest. Among the casualties, the brothers Kassamali Moledina and Amirali died in their post office, which burned, 35 others were hurt

• Broadwater Farm, Tottenham, October 1985: Began after the death of Cynthia Jarrett, 49, in a police raid. A small rally escalated into violence. In the evening PC Keith Blakelock was hacked to death at the Farm. Three local men were jailed for his murder, but cleared on appeal in 1991, after evidence that showed police notes had been altered.

London riots set homes, shops ablaze; 48 arrested

Police in London are in the process of “restoring calm” to an area of the U.K. capital after rioting led to 26 officers being injured and 48 arrests.

Metropolitan Police officers faced “extreme violence” during the disturbances in Tottenham, in the north of the city, late yesterday in which vehicles and buildings were set on fire, Commander Adrian Hanstock said in a televised press conference today. London Fire Brigade said it received 264 emergency calls from the area during the riots.

Trouble flared after a peaceful protest by relatives and friends of a man shot dead during a police operation in the area last week was “hijacked by troublemakers,” Hanstock said.

“There was no indication that the protest would deteriorate into the levels of criminal and violent disorder that we saw,” Hanstock said. “We believe that certain elements, who were not involved with the vigil, took the opportunity to commit disorder and physically attack police officers, verbally abuse fire brigade personnel and destroy vehicles and buildings.”

He said the death of Mark Duggan, 29, was “regrettable” and will be subject to an independent investigation. “It is absolutely tragic that someone has died, but that does not give a criminal minority the right to destroy businesses and people’s livelihoods and steal from their local community.

Rioters threw petrol bombs at police and buildings, the British Broadcasting Corp. said. A bus and two police vehicles were set on fire and business were looted, it reported.

London Fire Brigade said in an e-mailed statement it attended 49 “primary” fires in the Tottenham area.

The rioting was “utterly unacceptable,” Prime Minister David Cameron’s office said in an e-mailed statement. “There is no justification for the aggression the police and the public faced, or for the damage to property.”

Home Secretary Theresa May said “disregard for public safety and property will not be tolerated, and the Metropolitan Police have my full support in restoring order.

Police said 26 of its officers were hurt, one with a head injury, while arrests were made following the violence in Tottenham, north London, late on Saturday, which sparked condemnation from Prime Minister David Cameron’s office.

“The rioting in Tottenham last night was utterly unacceptable,” a Downing Street spokesman said in a statement.

“There is no justification for the aggression the police and the public faced, or for the damage to property. There is now a police investigation into the rioting and we should let that process happen.”

Police on Sunday said they were still having to deal with “isolated pockets of criminality in the Tottenham area involving a small number of people.”

A spokesman for the London Fire Brigade said all the fires were under control.

“We are still at the scene of some of them to damp them down and make sure everything is out,” he added.

The mayhem, which broke out in Tottenham just before sunset on Saturday, followed a protest over the death of a 29-year-old man last week during an apparent exchange of gunfire with police.

Thursday’s killing of Mark Duggan, a father-of-four, was “absolutely regrettable,” police commander Adrian Hanstock said in a statement, adding that an investigation into the shooting was underway.

“It is absolutely tragic that someone has died, but that does not give a criminal minority the right to destroy businesses and livelihoods and steal from their local community,” he said on Sunday.

“There was no indication that the protest would deteriorate into the levels of criminal and violent disorder that we saw,” Hanstock said.

The demonstration had been a peaceful rally outside the police station on Tottenham High Road before two police cars were attacked with petrol bombs and set ablaze.

S&P cuts US rating, flays Congress

US cut its "gigantic military expenditure and bloated welfare costs," another downgrade would be inevitable.

But other countries, such as Australia, France and Japan, said they retained their faith in US bonds.

The downgrade ended a week of growing uncertainty for the world economy.

Fears that the US might be headed for a double-dip recession and the eurozone's debt problems were set to spread to Italy and Spain saw stock market sell-offs around the world.

The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.

This in turn could trickle down to higher interest rates for local governments and individuals.

One initial estimate says that could add an extra $75bn (£46bn) to the US annual interest rate bill at a time when its debt levels are already high.

The other two major credit rating agencies, Moody's and Fitch, said they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.

An unnamed Japanese government official told Dow Jones Newswires Saturday that Tokyo continued to trust US Treasuries "and their attractiveness as an investment will not change because of this action."

India described the downgrade as "grave," while Russia and France said they were untroubled by the rating slip, and Britain's Business Secretary Vince Cable called it "entirely predictable."

The rating downgrade came after a strong pushback from the White House, which called S&P's analysis of the economy deeply flawed and politically-based.

A Treasury spokesperson alleged that there was a "two trillion dollar error", arguing that S&P admittedly used the wrong baseline and erred on spending plans and debt projections.

But John Chambers, chairman of the S&P sovereign ratings committee, defended the decision.

"It's a matter of the medium and long-term budget position of the United States that needs to be brought under control," he said on CNN.

"This is a problem a long time in the making."

He pointed to the White House, Democratic and Republican lawmakers battling for months until the country was on the precipice of default on Tuesday before they finally agreed to a deal to raise borrowing limits and slash the deficit.

Tuesday's fiscal consolidation plan "falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics," S&P said in its ratings statement.

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned" back in April, it said.

"Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising US public debt burden in a manner consistent with a 'AAA' rating."

A debt downgrade is a symbolic embarrassment for President Barack Obama, his administration and the United States, and could raise the cost of US government borrowing - a move that would likely trickle down to most Americans in the form of higher interest rates.

But S&P, which based its case in part on the assumption that Bush-era tax cuts would remain in place, also pointed the finger of blame at Republicans who had insisted that no new tax revenue be a part of the debt deal.

"We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act," S&P said.

There are worries that the downgrade will wreak unpredictable havoc in global financial markets where the US dollar has long been the most important currency, but some analysts believe the cut will not have much impact.

Indeed, despite a downgrade hanging overhead, the Treasury easily auctioned off tens of billions of dollars in new debt this week, and Treasury yields fell to the year's low.

S&P is considered the most influential of the three major rating agencies ahead of Moody's and Fitch - both of which said this week that they continue to review the country's deficit reduction plan for possible downgrades.

S&P first warned Washington of a possible downgrade in April.

Then in July, during the protracted political standoff over raising the government's debt ceiling, S&P placed the United States on credit watch and warned of a possible cut within 90 days.

The plan finally agreed on Tuesday calls for $US917 billion ($878 billion) in cuts over 10 years, but also mandates an as-yet unnamed congressional panel to come up with another $US1.5 trillion in cuts by the end of the year.

Miranda Kerr looks a million miles away as she dines out with happy husband Orlando Bloom

Kerr was the only model who managed to crack a smile at the David Jones parade in Sydney this week, and it worked for her.

For years now, models have such a grim look on their face when they walk down the catwalk.

Hopefully, Kerr's performance on Wednesday night will change things.

She's been a constant presence by his side since he was born, even taking him thousands of miles across the world to Australia with her.

So it was no surprise to see Miranda Kerr looking like she was missing her baby boy Flynn as she dined out with husband Orlando Bloom last night.

The model, 28, looked a million miles away as she and her actor other half met family for dinner in Rose Bay, Sydney, Australia this week.

Even when they all left the restaurant, Miranda looked itching to get a car home as they stood around talking outside.

Orlando, on the other hand, couldn't stop smiling and looked delighted to have a grown-up night out with his beautiful wife.

He even managed a broad smile for the cameras as he grabbed Miranda's hand and led her to their car.

Miranda has been in her motherland for just over a week now where she has been working and spending time with her family.

She flew out with Flynn and was joined by Bloom last week.

Apart from the modelling work she has been doing for department store David Jones, she has not left Flynn's side.