Market wrap: Futures traders expect a positive start to the trading day on the ASX after advances in overseas markets and key resources.
With 50 minutes left to trade, the SPI futures index was up 41 points at 4443, despite a see-saw night on Wall Street after a surprise fall in US retail sales. US stocks plunged into the red at the open but recovered by the close. The Dow Jones added 0.39%, the S&P 500 rose 0.69% and the Nasdaq 0.53%.
Investors were taken aback by news that retail sales fell 0.1% in July, against expectations of a gain of 0.8%. "The decline in retail sales is quite startling to say the least," said one analyst.
Financial stocks benefitted from news that a renowned hedge fund bought during the second quarter. The S&P Bank Index rose 2.75%. Also advancing were miners after buying in gold, oil and base metals.
Crude oil futures continued to hover near recent highs, rising 0.5% to $71.07. Gold futures benefitted from a slump in the US dollar after the retail data, recently trading 0.4% higher at $954.50. It was a boom night for base metals, with copper, nickel and zinc breaking out to fresh 2009 highs after the US Federal Reserve's claims that the recession is receding. In London, copper rallied 3.1% to a 10-month high, nickel blasted 8.5% higher in intraday trade and zinc hit its highest level since July 2008. Aluminium, tin and lead also advanced.
TRADING THEMES TODAY
REITS: There were huge gains yesterday for the likes of CNP, CER, VPG and ILF. When a sector runs hot, it's always worth sifting through the rest of the listed companies for the next runner. MDT, GJT, MOF (I hold) and MCW have potential.
BASE METALS: Always worth sticking with whatever theme is working for as long as it works. New highs in key metals should translate into rallies today.
COMPANY REPORTS: Today is a monster day in the local reporting season with reports due from AND, AQA, AVO, BKY, BMN, BOW, CVN, ESG, EXT, FRS, JML, KAR, LNG, MEL, MMX, MUN, NHC, NKP, NXS, PLA, PXS, SPH and SRK among others. Companies whose results are well received have tended to rally for at least two days this reporting season (eg, FLT, JBH, CBA), so buying advancers at the end of reporting day looks to be a promising strategy.
