Shares are set to jump at the open after upbeat global economic data helped US stocks and resources overcome a computer glitch that stalled trading on the Nasdaq overnight.
The September SPI 200 futures contract surged 43 points or 0.8% to 5082 as the Dow broke a six-session losing run, oil, gold and copper rebounded and European markets saw their best rally in three weeks.
Rises in energy and industrial stocks steered the S&P 500 14 points or 0.86% higher as improving economic data from around the globe helped Wall Street look beyond its fixation on Federal Reserve "tapering". The Dow added 66 points or 0.45%, ending its longest losing run in 13 months.
The Nasdaq put on 1.09% despite a three-hour shutdown from midday caused by a data-feed problem. Normal trading resumed just before the regular market close. Read more here.
Solid US data underlined a strong run of economic signals from around the globe that included yesterday's Chinese manufacturing surprise and the best European business activity reading in two years. In the US, the monthly average of first-time claims for jobless benefits fell to a five-and-a-half-year low despite a modest up-tick last week to 330,000 from a revised 323,000 the week before. House prices rose a seasonally-adjusted 0.7% in June for a year-on-year gain of 7.7%. An index of economic indicators improved by 0.6% last month.
"The employment numbers were encouraging and showed a continuation of slow growth in employment," the head of equity strategy and research for Wells Fargo Private Bank in the US told Bloomberg. "There are signs of stabilisation in China and improvement in Europe, which could help US multinationals in the long run."
European shares enjoyed their best session in three weeks after data suggested the euro-zone is accelerating out of recession. The Markit preliminary composite purchasing managers' index hit 51.7 this month, a 26-month high and up from 50.5 last month. The Stoxx Europe 600 index rallied 0.98% as Germany's DAX advanced 1.36%, France's CAC 1.09% and Britain's FTSE 0.88%.
Preliminary August manufacturing data from China yesterday beat expectations. HSBC's flash purchasing managers' index clocked in at 50.1, a four-month high, raising hopes that a recent run of deteriorating readings may be at an end. The news helped BHP and Rio Tinto enjoy healthy gains in US trade overnight. BHP put on 1.83% and Rio added 2.24%.
Copper was well supported as the Chinese news raised demand expectations. US copper for September delivery was recently up nearly three cents or 0.9% at US$3.34 a pound. In London, copper added 1.1%, nickel less than 0.1%%, tin 0.3% and zinc 0.35%. Aluminium dipped 0.7% and lead lost 0.2%.
Oil paced the rally in US stocks to regain the US$105-a-barrel level. West Texas Intermediate crude oil for October delivery was lately up $1.35 or 1.3% at US$105.20 a barrel.
Gold overcame a rising US dollar to reclaim some of yesterday's losses in the aftermath of the release of the minutes from the last Federal Reserve meeting. Gold for December delivery was recently ahead by $6.10 or 0.5% at US$1,376.20 an ounce.
Iron ore was little changed yesterday. The spot price for import to China Import eased 10 US cents or less than 0.1% to US$137.70 per dry metric tonne.
TRADING THEMES TODAY
OUTLOOK BRIGHTENS: A very positive night on world markets saw US traders put their Fed obsession behind them and focus on promising economic data from home, Europe and China. The results should help our market finish a fairly gloomy week on a bright note. Financials, biotechs and precious metals miners were among the best of the sectors in the US. Small caps also enjoyed a strong night, pushing the Russell 200o index up 1.43%. There is no significant economic data due during Australian trading hours today, but earnings reports include CWN, LLC, MGR and SGM (source: Fairfax).
ECONOMIC NEWS: No significant domestic news scheduled today. Europe awaits quarterly German and British GDP figures tonight, plus consumer confidence. The annual Jackson Hole Economic Symposium is underway in the US, this year without Fed chief Ben Bernanke. The other highlight tonight in the US is new home sales.
