Morning traders. Thanks Trees.Market wrap: Shares are likely to...

Morning traders. Thanks Trees.

Market wrap:

Shares are likely to open modestly higher as falls in the big Australian miners in overseas trade dampen optimism following another late recovery in US stocks.

The June SPI 200 futures contract edged up nine points or more than 0.1% to 5386 after a poorly-received update from Rio Tinto weighed on iron ore producers.

US stocks overcame early losses during a nervy session following reports of fighting in Ukraine and disappointing economic data. The S&P 500 was down as much as 15 points mid-session before rallying to a closing gain of 12 points or 0.68%. The Dow added 90 points or 0.55% and the Nasdaq put on 11 points or 0.28% after earlier being down as much as 1.9%.

"Stocks are having meaningful moves in both directions because people are nervous on both sides," Michael James, managing director of equity trading at Wedbush in the US, told Bloomberg. "Subjectivity plays such a pivotal role, and emotions, in what's been going on in this market that it's hard to pinpoint what causes a turn in the direction."

Stocks found early support in quarterly earnings from Dow components Coca-Cola and Johnson & Johnson, but hit reverse following unconfirmed reports that Russian troops had been sighted in Ukraine after Ukrainian troops stormed an airbase. Russian Prime Minister Dmitry Medvedev claimed Ukraine was on the edge of civil war.

The reports fuelled a late sell-off in European stocks. The Stoxx Europe 600 index sagged 0.97% as Germany's DAX lost 1.77%, France's CAC 0.9% and Britain's FTSE 0.63%.

Also weighing on sentiment in the US were data misses in home-builder confidence and a regional manufacturing index. Builder confidence inched up to 47 this month from 46 in March, short of the consensus among economists polled by MarketWatch for a reading of 50. The Empire State manufacturing index, which measures factory activity in the greater New York region, dropped to 1.3 this month from 5.6 in March.

Shares in Rio Tinto fell 2.46% in US action after the company reported yesterday that bad weather cut iron ore production over the first three months of the year. BHP lost 1.64%. Spot iron ore for import to China edged up 10 cents to US$117.10 a dry tonne.

Base metals retreated ahead of China's quarterly GDP report later this morning. US copper for May delivery was recently down 1.8% or five cents at US$2.99 a pound. In London, copper fell 1.9%, aluminium 1.5%, nickel 0.8%, tin 0.3%. Zinc was flat.

Gold fell back from a three-week high amid reports of profit-taking ahead of the Easter break and stop losses being hit. Gold for June delivery was lately down $25.10 or 1.9% at US$1,302.40 an ounce after settling at US$1,300.30.

Oil retreated before recovering most of its losses as US equities rebounded. West Texas Intermediate crude oil for May delivery was recently off 21 cents or 0.2% at US$103.84 a barrel after settling at US$103.75.

TRADING THEMES TODAY

WAITING FOR CHINA: A general retreat from anything exposed to China (metals, miners, etc) explains the relatively subdued state of Australian equity futures despite more shaky gains in the US overnight. Wall Street looks like it is trying to stage a reversal from these levels, but much will depend on the reaction to China's GDP report for the first three months of the year due at noon AEST. Economists expect a mild deterioration in growth to 7.4% from 7.7% at the end of last year, according to Forex Factory. Also due are monthly industrial production data, retail sales and fixed asset investment.

ECONOMIC NEWS: A leading index is due at 10.30am EST, by the day's main event is the noon Chinese update (see above). Tonight's US highlights include building permits, housing starts, industrial production, capacity utilisation, crude oil inventories and speeches by various Fed members, including the Chair.

Good luck to all.