Market wrap: A positive start to trade lies ahead after a bright session on Wall Street offset a mixed night on commodity markets.
The March SPI futures contract ended the night session 11 points or 0.23% stronger at 4781 as share buybacks and take-overs boosted sentiment in the U.S.
The Dow has the 12,000 level in its sights for the first time since the middle of 2008 after closing 109 points or 0.92% stronger at 11,981. The S&P 500 rallied 0.58% and the Nasdaq rebounded 1.04%.
Resource and tech stocks led the gains, with Alcoa topping the blue chips and BHP (+2.1%), Rio Tinto (+3.4%) and Alumina (+2.5%) all recovering some of last week's falls.
"Earnings have been great and companies are flush with cash," the chief investment strategist at Wells Capital Management in the U.S. told Bloomberg. "That allows them to engage in buybacks and M&A activity which in turn boosts optimism on stocks."
Copper and tin fronted metal gains during a mostly soft night for commodities. Copper rallied for a second day and tin marked a new record high. In late trade in London, copper was up 1% and tin 0.9%. Aluminium eased 0.2%, lead 0.6%, nickel 0.2% and zinc 0.35%.
Gold fell to its lowest level in around three months. Gold for February delivery was recently down $6.10 or 0.5% at $1,335 an ounce. March silver dropped 47 cents or 1.7% to $26.96 an ounce.
Oil was squeezed by the threat of increased supply from the Organisation of the Petroleum Exporting Countries (OPEC). Crude futures retreated $1.27 or 1.4% to $87.84 a barrel after Saudi Arabia's oil minister said OPEC may increase production to meet rising demand in developing countries.
The major European markets rallied into the close as Wall Street moved higher. Britain's FTSE advanced 0.81%, Germany's DAX 0.08% and France's CAC 0.39%.
TRADING THEMES TODAY
PRE-HOLIDAY CAUTION?: A mixed lead from overseas, with the good outweighing the bad. US stocks up, European stocks up, Australian miners listed overseas up, copper up. Against that you have oil down, gold down, most base metals down. Our market arguably pre-empted last night's up-move in the US yesterday and tomorrow's public holiday is likely to weigh on local trade today. A lot could happen in the two sessions in the U.S. before the ASX re-opens on Thursday, so it would not be a surprise if we see some softness in our market after an initial push higher this morning.
FLASHPOINTS: A handful of Australian stocks may come under pressure today because of their exposure to Thailand and Russia, following overnight developments in each country. Thailand's benchmark stock index suffered its biggest fall in more than a year yesterday, plunging 4.3% after nationalist protesters pledged to occupy the capital indefinitely. Russia's benchmark index dropped 1.5% after a suicide bombing at Moscow Airport. Sovereign risk in both countries has increased in the short term and may bring buying opportunities for those with a longer perspective.
ECONOMIC NEWS: The monthly leading index is due at 10 am, followed by the quarterly consumer price index and trimmed mean CPI at 11.30 am. Consumer confidence is the main report of interest tonight in the U.S. Also scheduled: regional manufacturing and two house price indexes.
