The Australian share market was clinging to gains at lunchtime as US futures followed regional markets lower and the Reserve Bank warned of higher interest rates ahead.
At lunchtime the ASX 200 was ahead 9 points or 0.2% at 4659 as strength in BHP, Rio Tinto and defensive sectors outweighed falls in property trusts, industrials and small caps. Financials were unchanged.
The market briefly surrendered early gains in mid-morning after the minutes from the last Reserve Bank meeting said interest rate hikes were likely if inflation continues to rise. Rate rises are seen as broadly negative for equities.
"Members judged that if economic conditions continued to evolve as expected, higher interest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target," the minutes said.
US futures eased as regional markets continued yesterday's declines. Dow futures were recently at -29. Japan's Nikkei lost 0.55% in morning trade, Shanghai 0.89% and Hong Kong's Hang Seng 0.44%.
Crude oil futures eased another 18 cents this morning to US $96.81 a barrel. Spot gold was $3.40 stronger at US $1,492.20 an ounce. The dollar was buying US $1.0547.
Good to see a little spine in our market this morning, courtesy of the big two miners. However, risk appetite remains weak, with the small caps getting belted once more. Tough old morning in the middle for this batsman. Swung and missed more times than I care to mention in the first hour. Connected with a few mid-morning but there are no guarantees that those are going to reach the boundary. Got a few runs on the board with bounce-scalps in BYR and GOR. Got to pick your shots carefully in these conditions. Right, I've probably stretched this cricket metaphor as far as it will go...
