Resource stocks spearheaded a rebound in Australian shares this morning despite a mild paring of overnight commodity gains and a flat session for Asian equities.
At lunchtime the ASX 200 was trading 58 points or 1.1% ahead at 5266 and on track to recoup almost a third of its losses over the last two sessions. Gold stocks led the rally, rising 7.6% despite a mild easing in the price of the metal this morning. Gold futures for February delivery slipped $10.20 or 0.8% to US$1,207.90 an ounce. The energy sector bounced 2.9% from yesterday's five-and-a-half-year low. West Texas Intermediate crude oil for January delivery eased 43 cents this morning to US$68.57 a barrel.
Metals & mining +3.3%, materials +2.7% and property trusts +1.9% were also notably strong. Consumer staples dropped 0.5%. Copper pulled back more than a cent this morning in the US to US$2.92 a pound.
A measure of volatility in commodities hit a two-year high yesterday as the Bloomberg Commodity Index fell to a five-year low. “Commodities will be a huge influence on trade in 2015,” Evan Lucas, market strategist at IG, told Bloomberg. “Global growth, global wealth and global sentiment will be driven by what happens in this space.”
Local sentiment was boosted by news of a large recovery in building approvals during October. Approvals increased by a seasonally-adjusted 11.4%, reversing an 11% dive in September. Read more here.
China's Shanghai Composite and Hong Kong's Hang Seng both edged up 0.1%. Japan's Nikkei was off 0.03%. Dow futures were recently ahead 13 points or less than 0.1%.
The dollar was buying 84.81 US cents.
Sweet relief for many traders this morning, including myself. The feeling would be sweeter still if I had held on to more of yesterday's buys. By COB yesterday my intestinal fortitude was at breaking point and when I asked myself whether I was man or mouse, the answer was more of a squeak than a roar. Kept some NST and PNA and sold into the early enthusiasm today. Otherwise today has been much, much quieter. SDF (who?) gave a trade from the open. Had a swing and a miss at a few more but none connected.
