Australian shares rallied this morning for the fifth day in six, buoyed by cautiously positive US futures.
At lunchtime the ASX 200 was 5 points or 0.1% higher at 4291 as gains in the big banks, industrials and most defensive sectors outweighed losses among miners and utilities after AGL reported a 51% drop in first-half profits.
The dollar recovered some of the losses sustained since Prime Minister Julia Gillard announced a leadership spill for the Labor Party. The dollar was this morning buying US$1.0747.
"What investors want is certainty," City Index FX strategist Kara Ordway told Fairfax. "What the situation is creating at the moment is shaky ground to where businesses are uncertain of what economic policies will be in the future."
Asian markets were mixed. Japan's Nikkei added 0.05% but Shanghai fell 0.15% and Hong Kong's Hang Seng lost 0.36%. Dow futures were recently up 21 points or nearly 0.2%.
Interest rates may remain on hold for some time after Reserve Bank governor Glenn Stevens this morning told politicians the cash rate was right for current circumstances.
"Our most recent assessment was that, with growth near trend, inflation consistent with the target, interest rates about average and an outlook suggesting more of the same, the setting of policy was about right for the moment," he told the House of Representatives Standing Committee on Economics, according to Fairfax.
Crude oil futures rallied another 27 cents this morning to US$108.44 a barrel. Spot gold was $4.20 softer at US$1,777.30 an ounce.
The bulls still hold the field but only just. Can our market tough it out to the close? I finally boarded the AGS express this morning once it became obvious that the selling had dried up. So far so good. Also scalped LNG on pullback.
