Australian stocks kicked to a one-week high this morning as the Shanghai Composite hovered near break-even for the first time in four sessions.
At lunchtime the ASX 200 was 58 points or 1% higher at 5642 with all sectors on the rise except gold (-0.3%). Leading the rally were metals & mining +2.2%, materials +1.9%, health +1.4% and industrials +1.3%. The financials sector gained 0.9% and energy 0.5%.
"The past two trading days have seen evidence of bargain hunting in resource stocks and banks," CMC chief market analyst Ric Spooner told Fairfax. "Cautious bargain hunting in mining and energy stocks this week has come despite ongoing declines in commodity markets. Buyer confidence may be further improved by last night's rally in underlying commodities."
China's Shanghai Composite was last down 0.22% after giving up early gains. Hong Kong's Hang Seng was 0.04% ahead and Japan's Nikkei off 0.58%. Dow futures were recently 12 points or less than 0.1% in the red.
Crude oil futures retreated 10 cents this morning to US$47.88 a barrel. Spot gold was $1.30 firmer at US$1,097.50 an ounce. The dollar was buying 73.35 US cents.
Shanghai looks wobbly but has likely done enough to restore confidence, at least for now. Wall Street's attention will swing back to the Fed and earnings this evening. They'll look for any indication that the recent ructions in Europe and Asia will delay the first rate rise in donkeys' years. Trading: got a wage out of HMI from late yesterday. RIM starting to swing around from late last week. Yet to find anything new to buy today.
