Regional markets have advanced for a fourth straight day as end-of-month fund buying swamped any caution ahead of a big week of market-moving news events.
At lunchtime the ASX 200 was up 37 points or 0.9% at 4282 and on track for its best close since mid-May and its longest win streak since the start of the month. Resource stocks led the rally, pushing the energy sector up 1.8%, metals & mining 1.5% and gold 0.9%.
Asian markets were similarly buoyant. Japan's Nikkei rose 0.51%, Shanghai 0.02% and Hong Kong's Hang Seng 1%. Dow futures were recently up 30 points or 0.2%.
The morning's domestic economic news was mixed. Demand for business loans slowed in the June quarter and building approvals fell last month but by much less than predicted. The Veda business credit demand index eased to 4.5% last quarter from 8.8% in the three months to March. Building approvals declined by 2.5% in June after jumping 27% in May. Economists expected a drop of 15%.
"The latest [credit demand] data suggests a softening in the pace of real GDP growth after a very strong March quarter," Veda general manager for commercial credit Moses Samaha told Fairfax. "This could mean that we will see a slowdown in GDP growth in coming quarters."
Crude oil futures rallied 38 cents this morning to US$89.93 a barrel. Spot gold was $3.20 stronger at US$1,623.60 an ounce. The dollar was buying $US1.0524.
A much stronger morning than I anticipated. Has the market heard a whisper regarding this week's central bank meetings? I'm starting to wonder. The US dollar is down and oil and gold both up, so risk appetite has improved over the last few hours. This morning offered a couple of very nice bounce trades in APZ and AZM. The former has the endearing habit of selling off hard, then recouping much of its losses. Also squeezed a couple of hard-fought pips out of BLY. Well done to the SIR traders - my risk:reward analysis had me too far down the buy queue.
