Australian shares are on track to break a three-session losing run after a positive reaction to Alcoa's profit result and gains in most of Asia helped offset weak domestic retail sales.
At lunchtime the ASX 200 was 14 points or 0.3% higher at 4704 as a broad rally lifted all sectors except energy -0.3%, gold -0.2% and metals & mining -0.1%. Highlights included property trusts +1.4%, financials +0.4% and the Small Ordinaries +0.5%.
The rally came despite an unexpected drop in November retail sales. Sales fell 0.1%, confounding economists' expectations for a 0.3% rise after a flat reading in October. More positive were new home sales, which increased by 4.7% for a second month of gains.
"The November [retail sales] result is disappointingly soft," AMP Capital senior economist Bob Cunneen told Fairfax. "For the last two months - October and November - there was basically flat retail sales, so the Reserve Bank's interest rate cut in October has not had any positive impact on the consumer in terms of the willingness to spend. Then again... the Reserve Bank cut again in December, so that will eventually come through."
US futures were positive after Alcoa this morning launched the fourth-quarter earnings season with a return to profit. Dow futures were recently up 21 points or nearly 0.2%. Shares in Dow component Alcoa rallied 1.2% in after-market this morning.
Most Asian markets resumed their recent up-trends following a few days of consolidation. Shanghai eased 0.12%, Hong Kong's Hang Seng added 0.37% and Japan's Nikkei put on 0.39%.
Crude oil futures slipped eight cents this morning to US$93.20 a barrel. Spot gold was $3.30 softer at US$1,658.60 an ounce. The dollar was buying $US1.0504.
Some froth in the market these last few sessions. Enjoy it while it lasts but always have one eye on the exit. Lots of pumps coming out of thin air - KMC Monday, MEO yesterday, GMR today. Profits to be made but you have to be nimble. Hope no one got burned on AZS this morning. I thought it would have another rise in it but was happy to buy the first plunge to the low 5s. Bought well, sold poorly. Should have tucked away a lot more than I did. Hoping for further weakness tomorrow for another dip. Only other trades were a modest scalp in MYR when it over-reacted to the retail sales report and more recently HVN because if it works once, stick with it until it doesn't.
