Australian shares inched to a seven-day high in wary trade ahead of this afternoon's Reserve Bank cash rate decision.
At lunchtime the ASX 200 was 15 points or 0.4% stronger at 4311 and on track for its highest close since early December. Advances in energy stocks, financials, industrials and financials offset falls among resource stocks and property trusts. The financial sector advanced 0.2% despite a negative response to earnings reports from NAB and MQG.
The gains came as traders awaited the 2.30pm announcement of the Reserve Bank's cash rate, expected by many observers to be cut by 25 basis points to 4%.
"The key issues for markets today in Australia will be the RBA interest rate decision and then, over the next few days, any announcements out of Greece on their restructuring of their debt and commitment of the political parties to the austerity required to receive bailout funds," CMC Markets chief market strategist Michael McCarthy told Fairfax. "There are a lot of reasons for investors to be sitting on the sidelines and waiting and watching to see what these key events will mean for markets."
Most Asian markets fell back following a weak night in Europe and the US. Japan's Nikkei lost 0.21%, Shanghai fell 1% and Hong Kong's Hang Seng rose 0.29%. Dow futures were recently up 21 points or nearly 0.2%.
"Patience for Greece seems to be running short," strategists at BNP Paribas told MarketWatch. "The euro-zone financial system is not yet seen to be in a position to deal with a disorderly Greek default and possible European Monetary Union or European Union exit."
Back home, construction activity declined last month for the 20th straight month. The AiG/HIA performance of construction index dropped 1.2 points to 39.8.
Crude oil futures rallied 24 cents this morning to US$97.40 a barrel. Spot gold was 20 cents stronger at US$1,723.50 an ounce. The dollar was buying US$1.0722.
Interesting to see the reaction this morning to the first big batch of earnings reports. This looks like a "buy any weakness" market - MQG, BKN and to a lesser extent NAB all bounced well from their lows. COH took off like a scalded cat. All very bullish signs. Meanwhile, I squeezed a point out of BLT from the low and grabbed a few SLR as the swing-low developed.
