Shares kicked higher for a second session as a post-budget rebound in the big banks gathered pace and energy stocks were boosted by a drop in US inventories.
At 1pm EST the ASX 200 was 29 points or 0.5% ahead at 5904 and setting up for a potential run at this year's high of 5956. The index retested support at 5833 earlier this week before moving higher yesterday.
"ASX 200 has shown that it just doesn't want to break below 5833," IG strategist Chris Weston told Fairfax. "A move and close through 5906 (the 61.8% retracement of the May sell-off) would be positive and would increase probability that the index tests and breaks the recent high of 5956."
The financial sector extended yesterday's rebound with a rally of 0.9% this morning as bank executives insisted the cost of the federal government's new levy would be borne by customers or shareholders.
“There is no ‘magic pudding’," Westpac chief executive Brian Hartzer told News Corp. "The cost of any new tax is ultimately borne by shareholders, borrowers, depositors, and employees."
The energy sector put on 0.8% on the back of a 3.5% recovery in US crude overnight following news of the biggest drawdown in US inventories this year. The drawdown was three times larger than analysts had predicted. Read more here. WTI crude futures added another 20 cents or 0.42% this morning to US$47.53 a barrel.
The morning's other best performing sectors included consumer staples +1%, health +1% and IT +0.5%. Telecoms fell 1.6% and utilities 0.6%.
China's Shanghai Composite shed 0.41%, Hong Kong's Hang Seng added 0.49% and Japan's Nikkei gained 0.15%. Dow futures were recently down six points or 0.03%.
Gold futures rose $1.60 or 0.13% this morning to US$1,220.50 an ounce. The dollar was buying 73.49 US cents.
Trading: took a deep bath on THD yesterday, so have been overly cautious today. Waited for THD at 2.4c, but was too far down the queue for a fill. Placed a few other buy orders, but no fills as yet. Not exactly spoiled for trading choices right now.
