Australian shares edged higher this morning as the big banks rallied and regional markets shook off a weak overnight lead from Wall Street.
At lunchtime the ASX 200 was 4 points or 0.1% ahead at 4802 after earlier touching its lowest level since early February. Gains in financial shares, property trusts and energy stocks offset falls among miners, small caps and some defensive sectors.
Oil edged higher but remained well off the overnight high near US$107 a barrel. Crude futures this morning rallied 20 cents to $105.06 a barrel.
"It's sentiment and fear that's driving the market at the moment, rather than substance," Austock Securities senior client adviser Michael Heffernan told Fairfax. "But we've showed a lot of resilience this morning, as I think we should do. Libya supplies two million barrels a day out of 75 million barrels of oil, and oil's gone up 20 per cent in a month because of that. That's just unrealistic, in my view."
Soft business conditions persisted last month, despite a jump in business confidence, according to a NAB survey released this morning. Business conditions improved from -6 to -2 but remained below the zero level that divides expansion from contraction. Business confidence accelerated 10 index points to 14 as companies looked beyond floods in Queensland and Victoria.
"The multi-speed economy is again very evident,?" NAB said in a statement quoted on Fairfax. "Although mining is getting back to normal and recreation is doing well, a brace of domestically focused industries continues to suffer - retail, wholesale, construction and manufacturing. Conditions have softened in WA and SA, and remain poor in Tasmania. NSW now has the strongest conditions."
US futures improved as key Asian markets advanced. Japan's Nikkei rallied 0.44%, Shanghai 0.06% and Hong Kong's Hang Seng 0.24%. Dow futures were recently at +27.
Spot gold was $1.20 softer at $1,431.80 an ounce. The dollar was buying US$1.0119.
Our market looks ready to rally if the opportunity presents. Let's hope the respite in the oil price isn't another head-fake. I'm sticking to snapshot scalps until the mood of the market improves. Patience is crucial with that sort of trading and I had to wait until 10.40 before any opportunities presented. Got two trades away: HCH and AGYDA.
