Market wrap: A strong night on Wall Street and gains in key commodity prices have the Australian share market poised to recover most of yesterday's losses.
Futures traders expect our market to open 36 points higher this morning. The March SPI 200 contract closed at 4879 after a broad rally in the U.S. fuelled by take-over action and hopes of a delay for health-care reform.
The Dow Jones Industrial Average of blue chips rallied 1.09% to 10,725. The broader S&P 500 gained 1.25% and the Nasdaq again set the pace, rising 1.42%.
Investors ignored a decline in confidence among U.S. home builders and instead focused on Kraft's successful bid for UK chocolate-maker Cadbury and the prospects for health-care stocks if the Republicans win a key Senate seat in Tuesday's election.
Citigroup rose 2.9% despite reporting a fourth-quarter loss. "We're seeing very bullish psychology in the market today, given the news that's out there on the financials," the president of a portfolio-management firm told MarketWatch. "People who are buying today are buying the story of an eventual turnaround, that we'll have an orderly transition to profitability."
There were solid gains across the board in the U.S., with standout sectors including REITs +2.25%, pharmaceuticals +2%, natural gas companies +1.9%, tech stocks 1.9% and biotechs +1.8%.
Key commodities shrugged off a rising U.S. dollar. The dollar index, which tracks the greenback against a basket of six currencies, was recently up 0.56%.
Oil snapped its five-session losing streak as the U.S. share market rally fuelled optimism about the economic outlook. Crude oil futures were recently trading at $79.02 a barrel, up 1.3%.
Precious metals strengthened after a jump in inflation in the UK and liquidity-boosting moves in Canada. Platinum futures rallied 2.7%, palladium 3.2% and gold around 0.4%. The spot gold price was recently $1,137.20 an ounce, a gain of $4.50 on yesterday's New York close.
Most base metals advanced in London. Copper hit a one-week high on expectations of strong Chinese trade and industrial output data tomorrow. Copper gained 1.09% in London and 2.4% in New York, aluminium added 0.24%, lead slipped 0.2%, nickel gained 2.44% and zinc 2.3%.
European markets rallied for a second day. Britains FTSE added 0.34%, Germanys DAX 0.98% and Frances CAC 0.81%.
ECONOMIC NEWS: Nothing scheduled locally today. Tonight in the US: the monthly producer price index, building permits and housing starts.
