Shares face another subdued start after the big miners fell in overseas trade and Wall Street was little moved by Greek claims of an austerity deal.
The March SPI 200 futures contract ended the night session five points or 0.1% higher at 4260 as the overseas reaction to this week's profit results from Rio Tinto and BHP limited the advance.
Wall Street edged higher after Greek political leaders agreed on austerity measures and the Prime Minister announced the government had "successfully" concluded talks with the IMF, EU and ECB about a second rescue package. However, equity markets reacted cautiously as European leaders warned that Greece will have to enact the terms of the agreement before money changes hands. The S&P 500 inched 0.15% to a new seven-month closing high, the Dow added seven points or 0.05% and the Nasdaq put on 0.39%.
Market commentators attributed the subdued reaction to scepticism that the latest development marked the end of Greece's drawn-out debt crisis. A portfolio manager at Bryn Mawr Trust in the US told MarketWatch Wall Street would wait "until [the second rescue package is] officially approved by the finance ministers. How many times have we been down this path and come out with nothing? I do think, although this is a very early step, they will come to their senses and get this thing resolved."
Also supporting the market was another drop in US weekly jobless claims. Initial claims fell by 15,000 last week to 358,000 and the four-week moving average declined to its lowest level since April 2008.
Australia's big miners lost ground in US trade as overseas investors responded to Rio Tinto's full-year earnings report, released after Australian trade closed last night. The result was marred by an $8.3 billion impairment charge taken against the mining giant's aluminium assets. In US trade last night, Rio fell 1.3%, BHP 1.4% and Alumina 1.45%.
European markets pared early advances as Wall Street fell into the red in early trade. Britain's FTSE added 0.33%, Germany's DAX 0.59% and France's CAC 0.43%.
A rebound in the euro pressured the US dollar, making dollar-denominated commodities more attractively priced for overseas buyers. Oil rallied for a third night as the recent steady improvement in US employment data stoked hopes for improving demand. Crude for March delivery was lately ahead $1.02 or 1% at US$99.73 a barrel.
Copper climbed to a five-month high and other industrial metals rallied despite yesterday's unexpected jump in Chinese inflation. In London, copper rallied 1.9%, aluminium 1.3%, lead 1.8%, nickel 0.9%, tin 0.8% and zinc 1.8%. US copper was recently up 1.5%.
Gold rolled over as the US dollar clawed back some of its losses. Gold for April delivery was recently down 20 cents or 0.01% at US$1,731.300 an ounce.
TRADING THEMES TODAY
GREECE CELEBRATES, WORLD YAWNS: Greece's debt crisis inched another step closer to resolution last night but traders have long stopped believing it will conclude any time soon. Markets continue to creep higher but the easy gains are behind us as the indexes struggle against resistance. The market reaction to this week's results from BHP and Rio has been mildly negative and the XJO will struggle to make major headway without those two firing. However, in the meantime the spec end is booming and trading volumes are recovering as the earnings season gets into full swing. See here for today's reporting companies.
ECONOMIC NEWS: The Reserve Bank releases its quarterly monetary policy statement at 11.30am EST. Chinese trade balance data is "tentatively" scheduled for today, according to Forex Factory. Trade balance is also a highlight tonight in the US, along with preliminary consumer sentiment, a speech on housing from Federal Reserve Chairman Ben Bernanke, preliminary inflation expectations and the federal budget balance.
