Regional markets have advanced for a third straight day as risk appetite picks up after last night's impressive equity and commodity rallies in Europe and the U.S.
At lunchtime the ASX 200 was ahead by 66 points or 1.5% at 4445 and on track for only the second positive week in the last six. Property trusts and financial shares led the gains, rising 3.2% and 2.4%, respectively. Gold was the only sector to trade negative as investors took profits at the end of a week of strong advances.
"Things seem to have stabilised offshore, there is a big return of risk appetite right across equities and commodities, and currencies," Karara Capital dealer Phillip Weinberg told Fairfax websites.
Shares in Virgin Blue plunged 30% after the airline slashed its profit outlook and issued a glum outlook. Qantas fell around 4% in early trade but bounced back to positive territory.
Flagging consumption is likely to challenge growth forecasts for the local economy in coming months, according to data released this morning. The Melbourne Institute's review of economic trends for May says Australians are cutting spending on goods and services to deal with rising interest rises.
"Interest rate rises seems to have put on the brakes for consumption," the report said. Consumers expect conditions to worsen, with that measure sinking 10.6% in the survey. However, the Institute said the economy remained healthy.
Japan's Nikkei added 1.7% in morning trade, Shanghai 0.5% and Hong Kong's Hang Seng 1.6%. Dow futures were recently at -12.
A bounce in the U.S. dollar saw a minor deterioration in the price of gold but oil continued to rally. The spot gold price drifted $3.20 lower this morning to $1,209 an ounce. Crude oil futures rallied another 35 cents to $75.22 a barrel. The Australian dollar was up against the yen, sterling and euro and flat against the greenback.
I find these big gap opens treacherous to trade and reminded myself why by buying MBN at the open. It looked a reasonable bet to follow the rest of the nickel miners north but I would have done better with almost any of the others. Will probably hold to see what Monday brings. Also scalped VBA for beer money.
