The share market has rebounded from its worst week in three years as bargain-hunters dipped their toes and business confidence improved.
At lunchtime the ASX 200 was trading eight points or 0.15% higher at 5506 and within reach of its first rise in six sessions. The index sank almost 300 points last week, closing 8.1% off its April peak. A mixed morning saw gains in property trusts +1%, energy +0.9% and financials +0.4% outweigh declines in consumer staples -0.7%, consumer discretionary -0.8% and health -0.4%.
Positive domestic economic data this morning was partly offset by mildly disappointing Chinese consumer inflation. The China CPI slipped to 1.2% last month from 1.5% the month before. Economists had predicted a reading at around 1.3%. Producer inflation was flat and broadly in line with expectations at -4.5%.
"Both CPI and PPI data indicate that tepid domestic and global demand continue to weigh on economic growth, and the country is still facing serious downward pressure and awaiting the government to roll out more policy stimulus to support it," Hwabo Trus macro strategist Nie Wen told Fairfax.
Back home, NAB's business confidence index and conditions index both improved four points to +7. The confidence reading was the highest since last August. Job ads held steady last month. Home loans improved 1% in April.
Asian markets retreated. China's Shanghai Composite lost 0.06%, Hong Kong's Hang Seng 0.66% and Japan's Nikkei 0.8%. Dow futures were recently ahead 14 points or almost 0.1%.
Crude oil futures rebounded 25 cents this morning to US$58.39 a barrel. Spot gold was $1.60 firmer at US$1,175.20 an ounce. The dollar was buying 76.99 US cents.
Pretty remarkable the extent to which the relationship between the XJO and Wall Street has broken down over the last few months. Though there are reasons why Oz is underperforming, I can't recall the gap being this wide at any time in the years I've been trading. Just another way trading has become more challenging lately. Chi-X is my personal bugbear after another morning watching sell orders below me in the queue getting hit, then the market moving against me. Trading: suffered the same Iress issue as everyone else and missed some good entries in the first 20 minutes. Trying to play catch-up with FXJ and ESI. Might have been out of both now with a profit, but for Chi-X. What a rort.
