Morning traders. Thanks Trees and after-market regulars.
Market wrap:
Shares look set to recoup some of yesterday's losses after US stocks edged into record territory following reports of a breakthrough in the Greek debt crisis.
The March SPI 200 futures contract lifted 24 points or 0.4% to 5844 as the S&P 500 cracked 2,100 for the first time in the US and crude oil extended its rally into a third session.
Downbeat economic data and gloom over Greece kept US stocks underwater until oil reversed and news agencies reported that a source close to the debt talks claimed Greece will tonight seek a six-month extension to its current loan package. The S&P 500 responded by rising three points or 0.14% to close at 2,100.34, a record. The Dow put on 29 points or 0.16% and the Nasdaq five points or 0.11.
Greece will tonight step back from its previous refusal to continue its existing bailout deal by requesting a six-month extension, according to "a person familiar with the matter" quoted on Bloomberg. Such a move would represent a breakthrough in a stalemate between Greece and its lenders with funding due to run out at the end of this month. The reports emerged even as Greece's Prime Minister delivered a defiant speech in Parliament insisting his government will not give in to "blackmail" from its lenders over economic reforms. Read more here and here.
Energy shares led the turnaround in the US as oil reversed initial losses. The energy sector rallied 0.3% as West Texas Intermediate crude oil for March delivery settled 75 cents or 1.4% higher at US$53.53 a barrel after earlier falling as low as US$50.81. The rally extended oil's advance over the last three sessions to 9%.
“One day oil goes up $1 and risk assets rally, the next day oil goes down $1 and risk assets sell off,” Mark Luschini, chief investment strategist at Janney Capital Management in the US, told Bloomberg. “I suspect this will be the case until the market can figure out that supply has corrected to demand levels.”
Overnight reports showed a measure of confidence among US domestic builders fell to a four-month low this month and the Empire State Manufacturing Index, which measures factory activity in the greater New York distract, retreated from January levels but remained positive.
Australian resource giants BHP and Rio Tinto pared initial falls in US trade as iron ore turned lower for the first time in five sessions. BHP lost 0.39% and Rio Tinto closed unchanged. Spot iron ore for import to China yesterday fell $1.50 to US$63.60 a dry tonne.
Gold stocks retreated as gold fell to a six-week low as Chinese demand tailed off during Lunar New Year holidays. The NYSE Arca Gold Bugs index lost 3.32% after gold for April delivery declined $18.50 or 1.5% to settle at US$1,208.60 an ounce.
Base metals fell after data showed house prices in China slumped for a ninth straight month in January. In London, copper dropped 1.7%, aluminium 0.4%, lead 2.2%, nickel 2.6%, tin 0.4% and zinc 2.2%. US copper for March delivery was recently down 0.3% or two-thirds of a cent at US$2.60 a pound.
Europe's benchmark share index shook off early losses to inch higher amid optimism that Greece and its lenders will reach a compromise. The Stoxx Europe 600 put on 0.12% as Germany's DAX fell 0.25%, France's CAC rose 0.04% and Britain's FTSE added 0.6%.
The dollar was this morning buying 78.25 US cents.
TRADING THEMES TODAY
STEADYING THE SHIP: Yesterday's ASX fall looks overdone relative to the overnight performance overseas, so back up we go. International investors seem fairly confident that the posturing phase of the Greek debt talks are almost over and the two sides will soon knuckle down and reach a compromise. Oil is still swinging wildly but is far enough off its low to suggest that the low is in. Back home, some of the enthusiasm at the big end of the market has finally filtered down to the spec sector, but gains have been select and not necessarily sustained. We could use a new "hot" sector.
ECONOMIC NEWS: There are leading indexes of economic indicators due from the Conference Board at 10am EST and the Melbourne Institute at 10.30am. Trading in China remains suspended for Lunar New Year holidays. A substantial menu in the US tonight includes the minutes from the January Federal Reserve meeting, building permits, housing starts, producer price index/core PPI, industrial production, capacity utilisation rate and long-term purchases.
