Australian stocks rebounded this morning as a cash injection into the Chinese financial system helped Asian markets recover from yesterday's sell-off.
At lunchtime the ASX 200 was 25 points or 0.5% higher at 5319 as a mixed market saw declines in the likes of metals & mining -0.4%, materials -0.3%, energy -0.3% and gold -0.2% offset by rises in consumer discretionary +1.4%, health +1% and financials +0.8%.
Asian markets recovered after China's central bank pumped more funds into money markets to avoid a cash crunch as lending rates recorded their biggest surge in seven months.
The move "will reduce the credit-crunch fears and assure funding continues to follow into the Chinese economy," Evan Lucas, market strategist at IG, told Bloomberg. "This is further proof that the central bank is monitoring the situation daily and is unlikely to let the money markets get too far out of hand."
China's Shanghai Composite put on 0.77%, Hong Kong's Hang Seng 0.54% and Japan's Nikkei 1.36%. Dow futures were recently up 76 points or nearly 0.5% ahead of tonight's resumption of trade following a long weekend.
Crude oil futures bounced 17 cents this morning to US$93.89 a barrel. Spot gold was $2.50 weaker at US$1,251.60 an ounce. The dollar was buying 88.19 US cents.
Nice recovery, helped by much-improved US futures. NCR was a big opportunity this morning but my buy order was sitting a couple of pips too low and the run took off without me. I'm always reluctant to chase the price but it would have been worth it on this occasion. Consoling myself with the profits from a5six-point bounce in NMI.
