daytrading dec 11 pre-market

Morning traders.

Market wrap:

A strong session for industrial metals and slender gains on Wall Street have Australian shares pointing higher this morning.

The December SPI 200 futures contract ended the night session 10 points or 0.2% ahead at 4577 as US investors and metals traders found enough promise in Chinese economic data to overlook political ructions in Italy and the budget stalemate in Washington.

The S&P 500 traded both sides of break-even before closing in the middle of its trading range, 0.07% ahead. The Dow added 15 points or 0.11% for a fourth straight gain and the Nasdaq put on 0.3%.

"Investors continue to struggle with uncertainty surrounding the fiscal cliff negotiations weighed against fairly good economic reports emanating from both the US and China," the chief investment strategist at Wells Capital Management in the US told Bloomberg. "This tug of war is likely to keep the stock market range bound until we get an announcement out of Washington."

US stocks opened in the red after Italy's pro-austerity Prime Minister Mario Monti announced his intention to resign after his government lost the support of former PM Silvio Berlusconi. The news fuelled a spike in Italian bond yields and pushed the country's benchmark stock index, the FTSE MIB, down 2.2%. However, other European markets took the development in their stride, recovering as Wall Street turned positive. Germany's DAX and France's CAC both advanced 0.18% and Britain's FTSE put on 0.13%.

Weekend negotiations in the US over the January 1 "fiscal cliff" package of tax increases and spending cuts produced no public breakthrough. President Obama and Republican House Speaker John Boehner declined to reveal details of a Sunday meeting but issued identical statements that said "the lines of communication remain open".

The Shanghai Composite rallied 1.08% to a four-week high yesterday as traders focussed on an acceleration in industrial production and retail sales, rather than yesterday's disappointing export figures. Customs statistics yesterday showed exports last month increased just 2.9% from a year earlier, less than a third of the rate that economists expected.

"The export number isn't as important as industrial output, which contributes more to the economic recovery," a strategist at Zheshang Securities in Shanghai told Bloomberg. "Stocks will continue to go up to reflect the improvement of economic fundamentals."

Industrial metals hit multi-month highs as traders bet that the Chinese economy is pulling out of a near two-year slump. Copper neared a two-month high, while zinc, lead, aluminium and nickel reached two-month peaks and tin saw its best price in eight months. US copper for March delivery was recently up four cents or 1.2% at US$3.71 a pound. In London, copper rallied 1.2%, aluminium 1.9%, lead 3.7%, nickel 3.1%, tin 5.2% and zinc 2.8%.

Gold found support in short-covering and a softening US dollar. Gold for February delivery pushed up $7.90 or 0.5% to US$1,713.40 an ounce.

Oil's recent decline extended into a fifth session despite data showing Chinese imports nearing record levels. West Texas crude for January delivery was recently down 25 cents or 0.3% at US$85.68 a barrel.

TRADING THEMES TODAY

THREATENING THE HIGHS: Our market showed yesterday it is eager to have a crack at the October 17-month high, but it may need more of a platform than Wall Street offered this morning. If the market rallies, it will likely be on the back of the big miners after a US$2.40 rally in iron ore overnight to US$123.40 per dry tonne and strong gains on the London Metal Exchange. Metals traders are betting that China has turned the corner and that can only be good for the ASX. Rio Tinto broke out to a seven-month high yesterday and BHP may follow today. The Shanghai Composite has bounced off four-year lows in recent weeks and may once more steer our market higher.

INDUSTRIAL METALS: A bullish session on the London Metal Exchange last night saw multi-month highs across the board. That may be enough to wake the speculative mining sector from its recent slumbers. Many of our resources juniors have trailled recent improvements in metals prices and may now start to play catch-up. For those new to the market, this site offers daily and historical metals charts that shadow LME prices without being exact matches. In other words, it's a handy if imprecise yardstick for following the overnight action.

ECONOMIC NEWS: Business confidence figures are due at 11.30am EST. European finance ministers meet once again tonight in Brussels. Europe also releases economic sentiment data. Highlights in the US are the trade balance, wholesale inventories and economic optimism data.

Good luck to all.