A second quarter of strong economic growth helped Australian shares arrest a mid-morning fade and advance for the seventh day in the last eight.
At lunchtime the ASX 200 was up 34 points or 0.8% at 4296 with all sectors except gold (-0.4%) in the ascendant. The gains were broad, lifting financials, telecoms and property trusts by 1.1% and materials by 0.9%.
The market reversed a modest mid-morning decline after September-quarter GDP came in stronger than expected. Gross domestic product increased by 1% in the September quarter and June-quarter growth was revised upwards to 1.4% for an annual rate to September of 2.5%. The median expectation among economists was for quarterly growth of around 0.8% an an annual rate of 2.1%.
"It shows the economy is still performing quite solidly and continuing its recovery from the [December/January] floods," NAB economist Alexandra Knight told Fairfax. "I think the Reserve Bank decision yesterday was externally based."
Building industry news was less happy, with construction declining for an 18th straight month in November, albeit at a slightly slower pace. The AIG/HIA Performance of Construction Index improved by 4.9 points to 39.6, well below the 50-point level that separates contraction from expansion.
Asian markets resumed their recent up-trend amid optimism over this week's meeting of European leaders. Japan's Nikkei rallied 0.84%, Shanghai 0.32% and Hong Kong's Hang Seng 0.83%. Dow futures were recently up 53 points or more than 0.4%.
"There is an expectation in the market that Europe will advance measures to overcome the debt issues," an equities manager at SMBC Nikko Securities in Japan told Bloomberg. "While there's a sense of expectation in the market, investors still want to see the results of meetings this week of the European Union and European Central Bank."
Crude oil futures rallied 41 cents this morning to US$101.34 a barrel. Spot gold was $2.80 weaker at US$1,729.60 an ounce.
Nice to see the market ticking upwards but there's not enough volatility in this gentle ascent for my liking. I've averaged little more than a trade a day this week - all profitable but pretty tedious. ANP provided today's payday and I felt pretty good about taking a couple of pips from the lows until it kept going to 3.2c, dammit. Well done to the HOR-mongers.
