Australian shares joined a global relief rally this morning following a centrist win in France's weekend presidential election and signs of a rebound in commodities.
At 1pm EST the ASX 200 was up 29 points or 0.5% at 5866 after earlier running as high as 5885. Energy stocks led the rally, rising 2.3% after crude oil bounced off a five-month low. West Texas Intermediate crude futures were up 63 cents or 1.36% this morning at US$46.86 a barrel.
Hints of reversals in iron ore and base metals late last week lifted the metals & mining sector 1.5% this morning and materials 1.3%. Also strong: IT +1.3%, industrials +1.1% and health +0.9%. The financials sector rose 0.1% but was held back by ANZ trading without its dividend. The gold sector declined 1.1% as traders rotated out of havens into cyclical sectors.
A mixed morning of domestic economic news included a seven-year high in business conditions, solid job ad growth and a worrying plunge in building approvals. Last month an index of building approvals improved from +12 to +14, a level last seen in 2008. Business confidence also jumped, from +6 to +13. Job ads increased by 1.4% over the same period. However, the dollar retreated on news that building approvals dived 13.4% in March.
"The improvement in ANZ job ads and other leading employment indicators suggests we may be in for a sustained period of strength in the official employment data following the strong lift in jobs in March," ANZ head of Australian economics David Plank told Fairfax.
Most Asian markets rallied. Hong Kong's Hang Seng put on 0.43% and Japan's Nikkei 1.77%. China's Shanghai Composite remained under pressure, falling 0.61%. Dow futures were recently off six points or 0.03%.
Gold futures advanced $4.10 or 0.33% to US$1,231 an ounce. The dollar was buying 73.99 US cents.
Fresh fuel for the bull market this morning. Nice rebound to steady the nerves after a rather hairy week last week. Plenty of room for the XJO to move higher before meeting resistance. Of course, much will depend on commodity prices - dead cat or reversal? Trading: slim pickings in the swamps where I usually cast a line. Took ERA, CL8 and LAA for any partial recoveries.
