Optimism after a breakthrough in the two-month mining tax dispute has Australian stocks on track to snap an eight-session losing streak.
At lunchtime the ASX 200 was ahead 16 points or 0.4% at 4253 after the government announced a compromise on the proposed tax. However, the mining sector was trading unchanged, with most of the morning's gains coming in the industrial sector +1.7%, property trusts +0.7% and financials +0.3%. The gold sector slumped 2.8% after a 4% slide in the price of the precious metal overnight.
The government announced this morning that a re-branded "minerals resource rent tax" (MRRT) will replace the controversial "resource super profits tax" at the heart of a bitter dispute with the mining industry. The MRRT will apply only to iron ore and coal and will be capped at 30%. An AAP article compares the two taxes here.
The Minerals Council of Australia welcomed the news but said there was still work to be done.
"This is a positive outcome for Australia," MCA CEO Mitch Hooke was quoted on Fairfax websites. "This is a considerable improvement on the former proposed super mining tax, (but) it's unfinished business. We've still got a lot of work to do."
Asian markets were mixed after a weak overnight lead from Wall Street and commodity markets. Japan's Nikkei added 0.47% but Shanghai was recently down 0.2% and Hong Kong's Hang Seng off 0.6%. Dow futures were recently at a moderately bullish +41.
Crude oil futures charged 48 cents higher this morning to $73.20 a barrel. The spot gold price was $6.80 higher at $1,205.80 an ounce. The Australian dollar was higher against the major currencies, buying 0.8494 U.S. cents, up 0.34%.
Might just be a sniff of a global rally in the air. Oil and gold improving this morning, Japan up, U.S. futures up, China swinging this way and that. Wouldn't be surprised to see a short-term bounce start in the next session or two of trade. Couldn't make up my mind about how today would play out so I sat on my hands for most of the morning. Just one bounce trade in JHX. Starting to think about overnight holds. Will see how the afternoon plays out.
