daytrading may 8 pre-market

Morning traders.

Market wrap:

Australian stocks are set to rebound from yesterday's horror session after Wall Street took anti-austerity election results in Europe in its stride, closing little changed this morning.

The June SPI 200 futures contract ended the night session 31 points or 0.7% stronger at 4321 as European indexes shook off early losses and copper bounced off a two-week low.

Wall Street took its cue from overnight recoveries in European markets, where analysts said weekend election results in France and Greece would have little near-term impact on austerity accords. The S&P 500 inched into positive territory, adding 0.04%, but the Dow gave up modest gains in the final hour, losing 30 points or 0.23%. The Nasdaq put on 0.05%.

"The perception is that European governments are not going to do anything stupid," the head of asset allocation for ING Investment Management in the US told Bloomberg. "We're talking about changes on the margin. We're not talking about a wholesale change in fiscal policy. There was a big reaction to well-telegraphed news. It's good to see a bounce from the lows."

European markets opened deep in the red but most recovered steadily as the session wore on. The exception was Greece, where uncertainty over the make-up of the new government following violent swings to the far left and right in weekend elections cast doubt over the nation's future within the euro-zone. Greece's ASE Composite index plunged 6.67%.

"Even considering the push for a growth agenda among European leaders, including newly elected French President François Hollande, we see significant potential for a new Greek government to miss the next round of targets and a rising risk of a Greek exit from the euro within the next 12 to 18 months, and increase our probability of this occurring from 50% to between 50%-75%," analysts at Citigroup wrote in a note to investors quoted on MarketWatch.

In France, where the downfall of President Nicolas Sarkozy was well-anticipated, the CAC rose 1.65%. Germany's DAX rallied 0.12%, Spain's IBEX 35 2.72% and Italy's FTSE MIB 3.56%. Britain's FTSE was closed for a public holiday.

Oil fell for a fourth session, settling at a three-month low but well off its lowest point. West Texas crude for June delivery was recently down 50 cents or 0.5% at US$97.99 a barrel after trading as low as $95.34.

Copper recovered from a two-week low in thin US trade with the London Metals Exchange closed for a public holiday. US copper for July delivery was recently up four cents or 1% at $3.76 a pound.

"We are still in a phase where this tension between current softness in Chinese demand and the expectation of an ultimate improvement in conditions there in the second half of the year is keeping us in a relatively range-bound market for the majority of base metal prices," an analyst with Barclays Capital in the US told Reuters.

Gold was pressured by a mild rise in the US dollar, declining for a fourth time in five sessions. Gold for June delivery eased $6.90 or 0.4% to US$1,638.90 an ounce.

TRADING THEMES TODAY

REBOUND: If you thought yesterday's ASX reaction to weekend election results in Europe was wildly excessive, you thought right. Europe and Wall Street barely blinked, leaving room for a significant clawback on our market this morning. The big miners should gap up after modest falls in overseas trade, compared to falls of more than 4% here yesterday. Biotechs were notably strong in the US, airlines benefitted from oil at a three-month low and small caps outperformed the overall market, suggesting a slight improvement in risk appetite. Financials were also strong. It will be interesting to see how much of yesterday's 2.15% collapse the ASX 200 recovers today.

ECONOMIC NEWS: Trade balance data are due at 11.30am EST but today's biggest domestic news event doesn't take place until tonight: the Federal budget announcement at 7.30pm. The US is once again light on scheduled news, with economic optimism the only report on the diary for tonight.

Good luck to all.