Half-time round-up:The ASX smashed through to an 11-month high...

Half-time round-up:

The ASX smashed through to an 11-month high despite the tepid outlook for the economy flagged by a local index of economic activity this morning.

At lunchtime the ASX 200 was up 87 points or 1.92% at 4627, buoyed by heavy buying in the financial (+2.2%), mining (+1.9%) and gold sectors (+2.5%). Telecoms were also strongly ahead, up 3%, as investors reassessed yesterday's Telstra news.

In economic news, an index of activity in the local economy today showed that the pace of economic contraction slowed during July. The Westpac-Melbourne Institute index of economic activity revealed that business contracted at an annualised rate of 1.8%, an improvement on -7% in May. Westpac economist Bill Evans said the survey showed economic growth this year would be “tepid”, but 2010 should see a pick-up in activity.

Asian markets were mixed. Japan rose 1.19% and Hong Kong was up 0.64% but Shanghai ignored the strong overnight lead from overseas, sliding 2.09%. Dow futures were near-flat at +4. Crude oil futures slipped around 60 cents to $70.29 per barrel. The spot gold price was little changed at $1007.50.

Been a good morning here. Buying RFE late in yesterday's sell-off paid off this morning. Also snagged a couple of nice bounce trades in PGA and ABY. Still underwater in GRR but a slow recovery is underway today.

Potential overnight holds: RSN on breakout if it holds these gains. MNM may be worth an overnight scalp. PBG looks like breaking up out of a shallow rising wedge.