The share market has had its best morning in three weeks after jobs data suggested the economy is faring better than feared.
At lunchtime the ASX 200 was trading 55 points or 1% higher at 5849 and on track for its best return since a 57-point advance on February 18. The index yesterday closed more than 200 points off last Tuesday's seven-year high as global markets reacted to a sharp sell-off on Wall Street at the prospect of impending rate rises.
Financials and industrials led this morning's recovery, both sectors rising 1.4%. Other notable gains included telecoms +1.2%, consumer discretionary +1.2% and the Small Ords +1.1%. The metals & mining sector slid 0.3% and utilities 0.1%.
The market extended its gains even as the likelihood of further rate cuts was dulled by news that unemployment fell last month. The jobless rate dropped to 6.3% from a January rate of 6.4% as employers hired another 15,600 employees, in line with expectations. Economists were quick to dismiss the significance of the decline.
"Unemployment remains high and although the rate decreased marginally the participation rate also dropped, perhaps reflecting discouraged workers,” Aberdeen Asset Management senior investment manager Jasmin Argyrou told Fairfax. “There is considerable slack in the economy, bringing with it disinflationary forces that will likely lead to additional monetary easing.”
Asian markets rallied. China's Shanghai Composite gained 0.43%, Hong Kong's Hang Seng 0.02% and Japan's Nikkei 0.84%. Dow futures were recently up 23 points or more than 0.1%.
Crude oil futures slipped four cents this morning to US$48.13 a barrel. Spot gold was 30 cents ahead at US$1,150.90 an ounce. The dollar was buying 75.96 US cents.
Market does not seem to attach much significance to the jobs data, otherwise we would likely sell off on the reduced possibility of another rate rise. Good to see a genuine relief rally after a pretty gloomy week. Trading: for all the strength in the index, I could not find much this morning. Wanted PXS a pip or two lower, so left it. Been eying FXJ for a bounce but find it hard to believe they'll pull the same trick four days in a row - have a feeling today might be the sucker punch. Took CTX under $36 for a bounce that did not amount to very much. Got out of jail in RRL. Feeling better about MND from Tuesday.
