A rally in the big miners and banks helped the Australian share market advance for the first time in a week on increased hopes for monetary easing in China.
At lunchtime the ASX 200 was ahead eight points or 0.2% at 4055 as US futures strengthened and Japanese shares advanced. Blue chips spearheaded a rally on the ASX as gains in metals & mining (+1%) and financials (+0.5%) offset falls in industrials (-0.9%), energy (-0.9%) and IT (-2.1%). Risk appetite remained subdued, with the Small Ordinaries losing 0.6%, versus a 0.5% rise in the S&P/ASX 20.
The rally came as institutional investors drew hope from weekend remarks by Chinese Premier Wen Jiabao. Premier Wen hinted that monetary policy would need to be loosened to support economic growth. Read more here.
US futures flagged a positive start to trade tonight as shares in Japan advanced. Dow futures were recently up 49 points or 0.4%. This morning Japan's Nikkei put on 0.23%, Shanghai lost 0.21% and Hong Kong's Hang Seng dropped 0.4%.
"Today's move is merely a rebound from sharp losses on Friday and it doesn't have momentum to rise strongly," a Daiwa Securities strategist in Japan told Fairfax. "The G8 outcome lacked the punch to give much incentive for markets. The fate of Greece won't become clear until the election [on June 17], and markets will be swung around by comments from European leaders in the meantime, all of which makes it extremely difficult for investors to take any positions."
Crude oil futures rallied 50 cents this morning to US$91.83 a barrel. Spot gold was $4.20 stronger at US$1,596 an ounce. The dollar was buying 98.57 US cents.
Not a very convincing rally but we'll take what we can get at present. Oil, gold and US futures are all up, which suggests a slightly more optimistic bent to start the week. I couldn't see much reason for the rally, so I sat it out. Squeezed some beer money out of range trading NWH but don't have much to show for the session so far.
