Shares shook off an early wobble to follow Wall Street higher but mixed earnings news capped risk appetite.
The ASX 200 reached the halfway mark ahead 27 points or 0.5% at 5848 after a brief dip into negative territory during the first hour. Poorly-received earnings updates from TAH, BLD, CGF and SGF accounted for some of the early weakness. The index gathered steam as gold stocks tacked on 1.6%, metals & mining 1.2%, telecoms 1.3% and utilities 1.3%. The energy sector eased 0.2%.
Today's cautious start came despite a strong night in the US, where the S&P 500 rallied 1.39% and the Dow 1.7%. S&P 500 futures were recently unchanged.
The mood was upbeat on Asian markets. China's Shanghai Composite advanced 1.15%, Hong Kong's Hang Seng 1.43% and Japan's Nikkei 0.85%.
“It is hard at this stage to tell if the US markets have bottomed out, considering that bets against the dollar still remain significant,” Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo, told Reuters. “On the other hand, attempts by investors to pull money out of the emerging markets during last week’s turmoil appeared to have been unexpectedly limited, so that is an encouraging sign.”
Crude oil futures rose 22 cents or 0.37% this morning to US$59.52 a barrel. Gold futures faded $1.60 or 0.12% to US$1,324.80 an ounce. The dollar was buying 78.61 US cents.
Another cautious session here. The XJO has survived three tests of 5800 and looks to be building a base at these levels, but the big money still appears to be in accumulation mode. The mood in Specland has snapped back surprisingly quickly, which suggests last week didn't do as much damage to sentiment as previous corrections. It's the first day in a while that I'm making additions to my watchlist. Trading: dipped a toe in SCT at the low.
