Australian shares reversed early losses this morning despite weak U.S. futures and falls in Japan as the local trade surplus hit a 14-month high.
At lunchtime the ASX 200 was up 1 point or 0.02% at 4222 after earlier touching a fresh 11-month low at 4182. The weakest sectors were health -0.8%, consumer staples -0.8% and metals & mining -0.7%. Telecoms, utilities, industrials and financials led the risers.
The trade surplus swelled to $1.65 billion in May, the highest in 14 months and well ahead of forecasts of around $500 million. "It's a big tick in the box for stronger growth in the second half of the year," Brian Redican, a senior economist at Macquarie, told Fairfax websites. "It's good for our current account deficit; for company profits and for foreign investment sentiment on Australia."
U.S. futures were pointing to a weak start to a holiday-shortened trading week when Wall Street re-opens tonight. Dow futures were recently 45 points or 0.5% lower but improving in the last hour.
Asian markets were mixed. Shanghai snapped back from recent losses, recently trading 1.2% higher, but Japan's Nikkei was down 0.9% and and Hong Kong's Hang Seng off 0.1%.
Crude oil futures dropped another 31 cents this morning to $71.44 a barrel. The spot gold price was recently off $5.40 at $1,205.90 an ounce in volatile morning trade. The Aussie dollar was lower against all the major currencies ahead of this afternoon's RBA cash rate announcement, buying 0.8355 U.S. cents, down 0.5%.
A sluggish start, with trading volumes in many shares disconcertingly low, but our market definitely looks ready to bounce. A cautious morning for me ahead of a break from trading. Just one trade but a good one - KOR from 17. This will likely be my last post for a few days as we move house. My return some time next week will depend on Telstra. Hope to find the market considerably higher when I get back. Best of luck to all in the meantime.
