An early rally petered out as selling in the big banks resumed, undermining gains in resource stocks after crude oil surged overnight.
At 1pm EST the ASX 200 was down two points or less than 0.1% at 5837 after peaking earlier at 5872. The rally stuttered as the financial sector declined 0.6%, telecoms 0.4% and gold 0.1%. Industrial stocks put on 0.9%, metals & mining 0.4% and materials 0.3%. The energy sector advanced 0.2% after US crude rallied 3% overnight after Russia and Saudi Arabia proposed an extension to production curbs.
"An extension of OPEC and Russia's oil production cuts for another nine months should put a floor under the oil price in the mid-US$40 range as the market inches gradually towards balance," CMC Markets Chief Market Analyst Ric Spooner told CNBC.
China's Shanghai Composite gave up 0.77% and Hong Kong's Hang Seng 0.42%. Japan's Nikkei inched up 0.03%. Dow futures were recently down 11 points or 0.05%.
Crude oil futures gained another 22 cents or 0.45% this morning to US$49.07 a barrel. Gold futures added $4.50 or 0.37% to US$1,234.50 an ounce. The dollar was buying 74.17 US cents.
Not a lot of vavoom in this energy rally. Market doesn't seem willing to move far in either direction this week. Sold off yesterday then reset to neutral, rallied today then reset to neutral. Bank tax and the collapse in iron ore are obvious headwinds. Everywhere else in the world seems to be at record highs. Trading: THD was worth an intraday buy at 1.8c at its first visit but I didn't get them all away at 1.9. Bought more at 1.7. Market value looks more realistic now. Took the hit on AHY from yesterday.
