Thanks Gttrain. Half-time round-up:The share market has advanced...

Thanks Gttrain.

Half-time round-up:

The share market has advanced strongly for a second day as traders rotated back into yield stocks amid hopeful signs of stability in the dollar and in Canberra.

At lunchtime the ASX 200 was 86 points or 1.8% ahead at 4818 after Kevin Rudd was this morning sworn back in as Prime Minister and Opposition Leader Tony Abbott hosed down expectations that he will move a vote of no-confidence in the government. Mr Abbott told the Nine Network it was up to the people of Australia to choose their Prime Minister and he called on Mr Rudd to name an election date. Read more here.

The morning saw significant gains in yield sectors, including consumer staples +2.9%, telecoms +3%, utilities +2.4% and financials +2% after weak GDP data out of the US soothed fears that the Federal Reserve will start to wind back its stimulus program as early as September. Gold stocks rallied for the first session in six sessions, bouncing 5.9% after losing around a third of their value in under a month.

"The market is feeling a little more at ease about the tapering situation, given the weaker-than-expected US GDP reading," CMC Markets foreign exchange dealer Tim Waterer told Fairfax. "The market is, basically, thinking that the Fed may not be forced into tapering sooner than expected. They might have a bit more room to wait if data is coming in on the low side."

The dollar rallied about half a cent this morning to 93.27 US cents as May industrial profits from China improved on the previous month. Profits were 12.3% stronger than a year ago, up from 11.4% in April. The dollar has been inching higher against the greenback for the last four sessions.

US futures reflected a bright morning on Asian markets following overnight gains in Europe and on Wall Street. Shanghai was lately up 1.25%, Hong Kong's Hang Seng 1.55% and Japan's Nikkei 1.9%. Dow futures were recently up 40 points or nearly 0.3%.

Crude oil futures rallied 60 cents this morning to US$96.07 a barrel. Spot gold bounced $16 to US$1,241.80 an ounce.


A very obvious divergence this morning between gold shares and the POG this morning - got to be a bullish signal for those wondering when it's time to go back in. I thought about it at today's lows and then made like a chicken and bought something else. Pity. Can't complain too hard - had decent wins in PDN and IGO and took the chance to hand back my boarding pass in QAN.