The Australian share market has enjoyed its best morning in a month, shrugging off yesterday's credit downgrade for the big four banks and news that Japan has slipped back into recession.
At lunchtime the ASX 200 was ahead for the third straight day this week, up 65 points or 1.4% at 4759. All sectors were trading stronger, led by IT stocks +2.5%, gold +2.2%, energy +1.7% and metals & mining +1.7%. The financial sector rallied 1.5% as the four big banks snapped back from yesterday afternoon's late sell-off after Moody's downgraded their credit ratings.
Asian markets were mixed after news that the Japanese economy contracted for a second straight quarter from January through to March, plunging the country back into a technical recession. Japanese GDP shrank by a worse-than-expected annualised 3.7% in the first quarter as the March 11 earthquake and tsunami crippled parts of the country. Analysts said it may take another quarter of contraction before reconstruction efforts feed into improved GDP.
Japan's Nikkei turned lower, finishing the morning session off 0.11%. Shanghai was recently ahead 0.14% and Hong Kong's Hang Seng up 0.83%. Dow futures were recently at +18.
The Australian dollar benefitted from the overnight lift in risk appetite, recently buying US $1.0675, a rise of around a third of a cent.
Crude oil futures rallied 65 cents this morning to US $100.41 a barrel. Spot gold was $1.60 stronger at US $1,497.90 an ounce.
Not good news from Japan, but hardly unexpected, so our market carried on regardless and US futures traders don't seem concerned. Nice to see plenty of green on the screen for what feels like the first time in weeks. I took a quick profit on PNO from yesterday and scalped a couple of pips out of NAV. Should have been more aggressive in buying this morning but the Japanese figures gave me pause.
