Thanks Brit and morning crew. Half-time round-up: Shares...

Thanks Brit and morning crew.


Half-time round-up:

Shares advanced for a second day before paring gains after the minutes from the latest Reserve Bank meeting showed last month's rate cut was a tight call.

At 1pm EST the ASX 200 was ahead 26 points or 0.5% at 5385 after earlier running as high as 5395 before the release of the RBA minutes at 11.30am EST. The dollar jumped more than half a cent to 73.55 US cents as economists amended their expectations for another rate rise after the minutes showed debate within the central bank over whether to cut or hold. The odds on a cut next month promptly slid to 15%.

"Members discussed the merits of adjusting policy at this meeting or awaiting further information before acting," the minutes said. "On balance, members were persuaded that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing policy at this meeting."

Energy stocks led the rally, rising 2.8% as crude extended last night's 3% rally. West Texas crude was lately up another 52 cents or 1.1% at US$48.24 a barrel. Also strong were metals & mining +2.2%, materials +1.7% and +0.9%. The financials sector dipped 0.2%.

“Markets seem to be in a relatively sweet spot with a steadily stronger US dollar and resilient commodities prices,” Angus Nicholson, markets analyst at IG, told Bloomberg. "Many investors have been predicting a pullback in markets, but despite all the negativity, markets have continued to grind higher.”

Asian markets struggled for traction. China's Shanghai Composite shed 0.47%, Hong Kong's Hang Seng hovered around break-even at +0.04% and Japan's Nikkei gained 0.89%. Dow futures were recently off two points or 0.01%.

Gold futures were $6.80 or 0.5% stronger at US$1,281 an ounce.


The index has held pretty well, considering the reduced likelihood of further rate cuts. This string of five weekly gains is already the XJO's longest in two years, but a sixth rise looks increasingly within reach. Trading: rode the heavy swells in TV2 to a decent win. Smaller positions in PLS and MGC iced the cake.