daytrading sep 27 pre-market

Morning traders.

Market wrap: Australian shares are pointed sharply higher this morning after a relief rally fuelled by hopeful reports out of Europe swept world markets.

The December SPI futures contract ended the night session 105 points or 2.7% stronger at 3984 after the Dow staged its biggest rally in a month and oil, copper and the big Australian miners advanced in US trade.

US and European stocks took their cues from talk of interest rate cuts in the euro-zone, an expanded bailout fund and an increase in bond purchases. The news helped the Dow kick decisively higher in the final hours of trade for a gain of 272 points or 2.53%. The S&P 500 put on 2.33%, led by a 5% jump in bank stocks. The Nasdaq added 1.35%.

"You had some quasi-positive comments out of Europe," the global chief investment strategist for the IShares unit of BlackRock told Bloomberg. "The situation in Europe is a near-term risk, but if the global economy muddles through, you'll probably have room for a rally in stocks."

European markets rebounded with big gains for bank stocks following reports that the European Central Bank is considering cutting interest rates and reintroducing 12-month loans to banks. The market was also cheered by reports that the European bailout fund could be doubled. Britain's FTSE rallied 0.45%, Germany's DAX 2.87% and France's CAC 1.75%.

European developments helped US investors overlook a fourth straight monthly decline in new house sales. Sales fell 2.3% last month to the slowest pace since February, undermining hopes for a recovery in the moribund housing market.

Commodities endured a mixed session despite a pullback in the US dollar. Oil, copper and silver recovered some of last week's heavy losses, but gold and most base metals remained under pressure.

Oil fell below US$78 a barrel in early trade before catching a tailwind from the rally in US equities. Crude for November delivery was recently ahead $1.49 or 1.9% at US$81.37 a barrel.

Copper fell for a seventh day to a 14-month low in London but rallied in the US. In London, copper fell 1%, lead 2.8%, nickel 0.4% and zinc 1.5%. Aluminium added 0.2% and tin 1%. US copper was recently up 2.3%. In US trade, BHP and Rio Tinto both put on 2% and Alumina added 0.7%.

Silver clawed back some of last week's brutal losses after an increase in US trading margin requirements, but gold fell to a two-month low. December silver was recently up 65 cents or 2.2% at US$30.75 an ounce. Gold for December delivery was off $10.80 or 0.7% at US$1,629 an ounce.

TRADING THEMES TODAY

RELIEF RALLY: Global markets were so short-term oversold that it didn't take much to trigger a rally last night. A few comments from an anonymous euro-region central bank official and up we went. It will take more than that to put a market bottom in place, but we can enjoy a healthy start to today's trade after yesterday's bruising sell-off at the speculative end of the mining sector. We should see some short-covering this morning by investors wrong-footed by yesterday's bearish session. Financials led the rallies in Europe and the US, offering a clue to where the strength should be in our market this morning. There were also promising signs in oil, copper and silver.

ECONOMIC NEWS: Another very light day ahead for scheduled economic reports. There's nothing significant on the domestic schedule. Highlights in the US tonight include consumer confidence, the Richmond manufacturing index and the house price index.

Good luck to all.