Market wrap: Stocks are set to open at a new 2009 high after advances on overseas markets and solid gains for BHP after its profit result.
With 20 minutes left to trade, the SPI futures index was 52 points up at 4349, pointing to a third positive day for the local market.
North American and European markets recovered most of this week's losses. The Dow Jones Industrial Average rose 1.3%, the S&P 500 put on 1.15% and the Nasdaq 1.47%. The rally was broad-based, lifting all sectors.
The US Federal Reserve kept its key rate target steady near zero, as expected, and announced it would complete its planned purchase of $300 billion in long-term Treasury securities by October. US markets initially rallied at the news but faded to end the day where they were pre-announcement.
Oil futures caught the updraught, rising 1% to $70.19 despite a bigger-than-expected rise in US crude stockpiles. Gold futures gyrated wildly overnight but were recently near where they were this time yesterday at $946.30.
Base metals reversed this week's weakness. In US trade, copper gained 3.18% and aluminium 2.64%. There were also advances for nickel, zinc and lead.
TRADING THEMES TODAY
BELLWETHERS: Much of today's SPI optimism can be put down to the ten-pound gorilla on our market: BHP. The big miner reported after our market closed last night and a 62% fall in annual profit did not deter overseas investors because it raised its dividend. BHP rose 1.8% in the UK and 2.08% in the US. With yesterday's CBA result also cheered by the market, this week's two bellwether profit results have been well received and that bodes well for the rest of our market this reporting season.
BASE METALS: This week has seen many miners retrace significantly, but last night's buying on base metals markets puts most metals back near 2009 highs. We should see a swag of local miners play catch-up today.
FADE THE OPEN?: Our market has ignored overseas weakness all week, including big falls across key Asian markets yesterday. I've been too bearish all week but it would be surprising if the big premium to global markets implied by the SPI holds to the end of the week.
