Australian shares pared early losses this morning as home loan approvals picked up and Greece passed austerity measures, overshadowing signs of recession in Japan.
At lunchtime the ASX 200 was six points or 0.1% weaker at 4456 after bouncing off the 4440 level that has provided support over the last few sessions. Gains in defensive sectors were offset by falls in energy stocks -0.7%, industrials -0.7% and materials -0.3%. The financials sector was unchanged.
The market accelerated its recovery after the 11.30am EST release of data that showed home loan approvals increased by 0.9% in September, raising hopes for the housing industry.
"The data shows that loan value is rising at a faster rate than the actual number of loans. That suggests that there’s increased confidence by borrowers, or that home prices are edging a little higher," CommSec chief economist Craig James told Fairfax. "Could be an indication that consumers were beginning to feel the impact of rate cuts."
Asian markets were mixed as a slowdown in Japan overshadowed news that Greece's parliament this morning passed a tough austerity budget that should guarantee another tranche of bailout funds from international lenders. Read more on Greece here. Data this morning showed the Japanese economy shrank 0.9% last quarter, raising fears of recession after several economists predicted a second quarter of contraction is underway. Shanghai edged up 0.15%, Hong Kong's Hang Seng put on 0.14% and Japan's Nikkei fell 0.65%. Dow futures were recently up four points or less than 0.1%.
Crude oil futures retreated 17 cents this morning to US$86 a barrel. Spot gold was $2.70 firmer at US$1,733.40 an ounce. The dollar was buying $US1.0415.
The XJO is finding good support around this level and looks eager for an excuse to rally. Let's hope this week's economic new is accommodating. Some good rebound opportunities this morning - I caught QBE but regret passing on PDN and OSH. Also grabbed PDZ near the low. Speculator in VMT also.
