Australia's benchmark share index extended its three-day rise to more than 100 points this morning as Asian markets continued to rally.
At lunchtime the ASX 200 was 27 points or 0.6% ahead at 4319, the first time the index has traded above 4300 since mid-May. The gains were broad through cyclical sectors, with financials advancing 1.3%, energy 1%, metals & mining 0.9%, industrials 0.4% and the Small Ordinaries 1.1%. The defensive telecoms, utilities and property trust sectors retreated.
Asian markets advanced for a third day. Japan's Nikkei put on 1.63%, Shanghai 0.21% and Hong Kong's Hang Seng 0.15%. Dow futures were recently down 14 points or 0.1%.
"The recovery in US business conditions will bring benefits for the Asian economy," an equities manager at SMBC Nikko Securities in Tokyo told Bloomberg. "There's expectations that global easing policies may help stem the economic slowdown."
There was further evidence of improvement in the domestic housing market with June delivering the biggest rise in home loan approvals this year. The number of loans increased 1.3% in June, following a 0.9% dip in May.
Crude oil futures retreated 26 cents this morning to US$93.27 a barrel. Spot gold was $3.80 softer at US$1,611.10 an ounce. The dollar was buying $US1.055.
We're seeing an excellent example of how quickly markets swing from gloom to boom. Momentum now is the strongest in months, if not a year or two. Liquidity in the spec sector always trails the big end of the market but will slowly improve as market confidence returns. I mentioned a week ago that I was enjoying some luck in the market for the first time in ages. Truth is that "luck" is another measure of market conditions - the better the conditions, the luckier you get. I bought CPU late yesterday and was too careless to realise it was due to release earnings this morning. When I read a 40% profit plunge I feared the worst - instead I'm quids in because the market expected something uglier and is hungry for buying opportunities. Also caught a small bounce in SKI and missed a regulation pullback in AIO.
