daytrades may 28 pre-market

Morning traders.

Market wrap: Australian stocks are primed to open nearly 1.5% higher after a huge relief rally swept global markets after China quashed reports that it will sell European holdings.

With 15 minutes left to trade, the June SPI futures contract was up 64 points at 4446.

Overseas equity and commodity markets surged overnight after China confirmed its commitment to Europe. The news sent the euro soaring and oil and share indices in Europe and the U.S. up more than 3%.

On Wall Street, the benchmark S&P 500 index rallied 3.29%, the tech-heavy Nasdaq 3.73% and the Dow 285 points or 2.85%. In Europe, Britain's FTSE closed 3.12% higher, Germany's DAX gained 3.11% and France's CAC 3.42%.

The rally came after China's foreign exchange regulator said reports that spooked world markets yesterday that it was reviewing its euro holdings are "groundless". Also helping improving sentiment towards Europe, Italy announced US$30 billion in budget cuts and the Spanish Prime Minister gained parliamentary approval for his austerity plan.

"There is a huge sigh of relief that we're making progress on the European sovereign debt crisis through some of these budget-deficit-reduction announcements, and the announcement that big players like China are not going to back away from the market," a senior U.S. investment strategist told Bloomberg.

The euro, which has been steering world equity markets lower for weeks and hit a four-year low against the U.S. dollar last week, jumped 1.75% overnight. That helped send the U.S. dollar index, which tracks the greenback against a basket of currencies, down more than 1%.

U.S. investors ignored disappointing economic news - government data showed the economy growing at a slower pace than previously calculated and jobless claims fell less than expected. First-quarter GDP growth came in at an annual rate of 3%, below the 3.2% median estimate of economists surveyed by Bloomberg.

All but one of the Dow's 30 components traded higher and there were huge gains for Australian mining shares traded in the U.S. as commodity prices bounced back. BHP rallied 7.7%, Rio Tinto 9.2% and Alumina 11.9%. Among U.S. sectors, there were significant advances for REITs +5.5%, oilers +5.4%, banks +4%, insurers +3.9% and industrials +3.8%.

Crude oil charged to a two-week high as investors returned to "risk assets". Crude oil futures were recently up $3.35 or 4.7% at $74.87 a barrel.

Industrial metals also rallied as the slide in the U.S. dollar made dollar-denominated commodities less expensive for overseas buyers. In London, copper added 2.7%, aluminium 1.7%, lead 4.3%, nickel 2.3%, tin 2% and zinc 2.1%.

"I think fears about the euro-zone debt have eased somewhat," a Canadian commodity strategist told Reuters. "We see the global economy recovering. Even if austerity measures are taken in Europe, that's not going to have an overly negative impact on the global economy."

Precious metals also advanced, with palladium, silver and platinum leading the way. Gold see-sawed for most of the session. The spot price was recently up $1.60 from Wednesday's New York close at $1,212.20 an ounce.

TRADING THEMES TODAY

BOUNCE: Local futures say our market will open today at its highest level since the middle of last week, setting us up for a third day of gains and a positive end to a choppy week. There are definite signs that global sentiment is improving, but there are a few factors to consider before getting too carried away this morning. Firstly, huge relief rallies like last night are typical of bear markets, not healthy bull markets. We need to see more measured advances before we can conclude that this correction is over. Secondly, U.S. markets are closed on Monday for Memorial Day, which may limit further upside on Wall Street tonight if caution prevails. Thirdly, Fridays "tend" to fade towards the close as traders close positions ahead of the weekend. A lot of traders will be sitting on very healthy profits by lunchtime.

BASE METALS: There have been promising basing formations forming on industrial metal charts for the last few days and last night saw significant moves. Copper, the "metal with the degree in economics", broke to a two-week high and is leading the way. Others are pushing against short-term resistance. Cautious traders will require clear breaks before entering but the technical outlook seems the most promising in a month.

ECONOMIC NEWS: A quiet end to the week, with nothing scheduled locally to derail a rally. In the U.S. tonight: monthly personal income and spending, the Chicago Business Barometer, the Core PCE Price Index and revised consumer sentiment and inflation expectations.

Good luck to all.