Shares are higher for the first day this week as the dollar, regional markets and US futures benefit from a pick-up in risk appetite overnight.
At lunchtime the ASX 200 was up 42 points or 0.9% at 4627, with all sectors trading higher except the defensive health and utility stocks. Small caps outperformed blue chips, adding 1.1% versus 0.9%.
Resource stocks accounted for much of the rise, with the gold sector up 2%, energy 1.7% and metals & mining 1.7%. The big four banks rallied for the first day in five, helping the financial sector put on 0.5%.
"We've had a little M&A activity on the opening with the Austar bid [from Foxtel] formally announced," Cameron Securities client advisor Adrian Leppinus told Fairfax. "Otherwise, it's the big miners leading the way. We had good strong moves in commodity prices overnight."
US futures rose with Asian markets. Japan's Nikkei added 1.29%, Shanghai 0.4% and Hong Kong's Hang Seng 0.3%. Dow futures were recently up 31 points or 0.25%.
The dollar rallied more than half a cent this morning as strong capital spending in the first quarter soothed worries that the economy contracted following natural disasters in Queensland and Victoria. Private capital expenditure increased a seasonally-adjusted 3.4%, beating the consensus prediction for a rise of 2.9%. Analysts increased their expectations for Q1 GDP and said the rise increased the probability of an interest rate rise next month. The dollar was recently buying US $1.0588.
Crude oil futures rallied another 58 cents this morning to US $101.77 a barrel. Spot gold was $2.20 stronger at US $1,527.90 an ounce.
A solid morning, even if the banks are coming back under pressure as the session wears on - buying the open certainly hasn't been rewarded. I had the unhappy knack this morning of looking the wrong way when opportunities arose. My price alert for PXS was at 72 - the price hit 72.5 and reversed too far before I noticed. Missed the breakout in LNC. Got onto PRR a cent or two later than ideal. Picked the bottom in BKY but sold way too early. Glad I made the weekly wage yesterday.
