Overnight gains in commodity prices helped push Australian shares higher for the fifth time in six sessions before weak Chinese factory data soured the mood.
At lunchtime the ASX 200 was trading five points or 0.1% ahead at 5961 with gold +2.4%, health +0.6% and telecoms +0.5% leading the way. IT -0.8% and financials -0.3% were the only sectors to retreat.
The metals & mining sector was up more than 1% before the 12.45pm EST release of unexpectedly soft Chinese manufacturing figures. HSBC's preliminary manufacturing PMI slumped to 49.2 this month from a final reading of 50.7 in February. The reading was the weakest since last April.
The early gains in resource stocks came amid speculation that most commodity prices have bottomed during a torrid downturn in prices over the last few years.
"I think we are probably at the bottom of the cycle ... it's probably time now to be contrarian," Alain Fontaine, partner at Ocean Equity Capital, told the annual Mines & Money conference in Hong Kong, according to Fairfax. "This will happen first in the safest jurisdictions like Australia."
Asian markets turned lower in lock-step after the Chinese data. China's Shanghai Composite dropped 0.54%, Hong Kong's Hang Seng 0.56% and Japan's Nikkei 0.55%. Dow futures were recently two points or less than 0.1% ahead.
Crude oil futures slipped 26 cents this morning to US$47.19 a barrel. Spot gold was 10 cents weaker at US$1,187.60 an ounce. The dollar was buying 78.58 US cents.
Great volatility at the moment. Wish the market was always this lively. I had a quick roller coaster ride in MND, followed by a more relaxed bounce in CVT (one of those wonderful shares I always seem to make something on - its trading behaviour suits my approach). Big regret was MJP - had a buy order sitting at 98c (50% fib retrace) and I was too slow to move it to the dollar mark.
