Strength in the big banks helped steer Australian shares to a new 14-month high before softness among resource stocks and a mixed morning in Asia took its toll.
At lunchtime the ASX 200 was 12 points or 0.3% stronger at 4495 after earlier nudging 4517, its highest level since early August last year. Financials was among the pick of the sectors, rising 0.6%, along with by consumer staples +0.6%, industrials +0.5% and IT +0.7%. Gold stocks eased 0.7% and materials 0.6% following overnight weakness in commodities.
Asian markets traded mixed despite overnight gains in the US and Europe after American retail sales and Citigroup's earnings topped expectations. Shanghai eased 0.35%, Hong Kong's Hang Seng was little changed at -0.03% and Japan's Nikkei put on 0.85%. Dow futures were recently off 10 points or less than 0.1%.
"Citigroup's earnings [overnight] reinforced the confidence in the health of big firms, and the markets responded," an analyst at Hyundai Securities in Japan told Reuters. "US investors had been extremely cautious, but with the stream of good data, such as in retail sales data and corporate earnings, fears seem eased for now."
The minutes from the last Reserve Bank meeting revealed that concerns over falling commodity prices and postponed mining projects were behind last month's cash rate cut. The minutes said: "It seemed likely that mining investment would peak a little earlier and at a somewhat lower level than had previously been forecast." Read more here.
Crude oil futures edged down two cents this morning to US$91.66 a barrel. Spot gold was $3.90 lower at US$1,734.80 an ounce. The dollar was buying $US1.0249.
Still pockets of heat in this market, especially at the spec end. Pity about the volumes, but at least there are runners. I was mostly waiting for retraces this morning while previous buys inch towards targets. GWA and MOY coming good. Missed PRR at 13. Recently added OSH and MML on pullback.
