Australian stocks extended gains this morning as cooling Chinese inflation helped Asian markets and US futures recover from early weakness.
At lunchtime the ASX 200 was ahead 43 points or 1% at 4231, with all sectors trading higher except health, IT and property trusts. The biggest advances came in the gold sector +2.2%, consumer staples +1.1% and financials +1.1%.
The ASX pushed higher for a third day following the pre-market release of US President Barack Obama's $US447 billion plan to boost the American economy, and added to gains after the noon AEST release of Chinese economic data, which included a drop in consumer and producer inflation.
President Obama this morning urged Congress to pass a package of cuts to tax and government spending that he said was necessary to avert a "national crisis". The money will be spent on projects to boost employment, including modernising schools and transport infrastructure.
The monthly China economic update was broadly in line with expectations. The annual consumer inflation rate eased from 6.5% in July to 6.2% last month. The producer price index also dropped, from 7.5% in July to 7.3%, slightly above estimates. The declines encouraged hopes that Chinese interest rates will remain on hold.
US futures rallied this morning with Asian markets. Dow futures were recently up 66 points or 0.6%. Japan's Nikkei added 0.09%, Shanghai 0.7% and Hong Kong's Hang Seng 0.64%.
Crude oil futures rallied 75 cents this morning to US$89.45 a barrel. Spot gold was $9.10 weaker at US$1,861.30 an ounce. The dollar was buying US$1.0629.
A bullish morning. Let's hope US traders feel as enthusiastic tonight as they do right now. Looks like our market will finish the week little changed, but there were plenty of trading opportunities along the way. Not that I found any this morning. Been distracted from the after-effects of a whisky tasting last night and the prospect of finals footy tonight in Sydney. Early mark for me - off to Homebush. Go Tigers. Best of luck to all this arvo.
