The share market looks set to close higher for the week after a strong Friday reversal led by resource stocks as rebounds in iron ore and oil gathered pace.
At lunchtime the ASX 200 was trading 84 points or 1.4% ahead at 5928 and well placed to end the week comfortably above last Friday's close at 5878. The gains were spearheaded by the metals & mining sector (+2.6%) and energy (+2.3%) after iron ore extended a rebound from its low beyond 15% yesterday and crude oil hit its highest point of the year overnight. BHP rallied 2.8% to a six-week high this morning.
"There have recently been signs of investors rotating out of bank stocks and into mining and energy stocks, especially BHP," CMC Markets chief analyst Ric Spooner told Fairfax. "Investors appear to be chasing relative value buoyed by gains in iron ore and a broadly solid round of production reports... The recent lift in iron ore prices has also helped to support the Aussie dollar allowing it to withstand some disappointment over yesterday's softer than expected Flash PMI read from China."
The financials sector put on 1.2% but looked unlikely to avoid a second straight weekly decline. Other notable sector gains included utilities, gold and consumer discretionary, all up 2.1%.
US futures showed minimal reaction to well-received after-market earnings this morning from Microsoft, Google and Amazon. While Nasdaq futures rallied 0.4%, S&P futures were ahead 0.04% and Dow futures three points in the red. China's Shanghai Composite fell 0.72%, Hong Kong's Hang Seng gained 0.25% and Japan's Nikkei lost 0.8%.
Crude oil futures shed 19 cents this morning at US$57.45 a barrel. Spot gold was $1.80 lower at US$1,192.50 an ounce. The dollar was buying 77.71 US cents.
Good to see the market play catch-up this morning after under-performing all week. Still basically range trading but at least it's respecting the lows. Trading: dunno if I'm getting slower or the market faster but I missed most of the targets I swung at this morning - AZK, ACW, TNG. Eventually got a nice trade out of ZIP when it reached the buy zone. Also took a first stab at BCT. Ought to turn higher from around here if there is anything to this rally.
