RTTNews - The Australian stock market is trading higher on Thursday, tracking the overnight cues from Wall Street, where U.S. stocks closed mostly higher after the Federal Reserve announced it would keep interest rates unchanged.
Resource stocks are trading higher, while banking stocks are trading mixed. In early morning trades, the benchmark S&P/ASX 200 Index is gaining 18.30 points or 0.48% to 3,825.30 and the broader All Ordinaries Index is adding 19.60 points or 0.52% to 3,821.80.
On Wednesday, the Australian market closed modestly higher ahead of the outcome of the U.S. Federal Reserve's monetary outlook meeting. The benchmark S&P/ASX200 index advanced 10.1 points or 0.3% to close at 3,807.0, while the broader All Ordinaries index added 9.2 points or 0.24% to settle at 3,802.2.
U.S. stocks closed mostly higher on Wednesday, although the major averages turned in a mixed performance after the Federal Reserve announced it would keep interest rates unchanged and removed its warning about the possibility of deflation. Many economists believe the historically low rates could remain for some time, leaving worries that the massive stimulus efforts could lead to inflation down the road.
Crude oil closed a choppy session modestly lower on Wednesday after the Federal Reserve left interest rates unchanged. Investors also mulled over the Energy Department's weekly inventory report, which showed a drop in crude stocks but a rise in gasoline supplies. Light sweet crude for August delivery dropped to US$68.67 per barrel on the New York Mercantile Exchange, down US$0.57 on the session. Oil had touched as high as US$69.86 earlier in the session.
On the economic front, the Conference Board's Leading Economic Index, or LEI, for Australia increased in April by 0.7%, recording an increase for the third straight month. The April index reading was 113.5. The private sector research group noted that strength in building approvals, money supply and stock prices offset a decline in rural goods. The board's Coincident Index, which measures current economic activity, increased 0.1% in April. The April Coincident Index reading was 112.3. The board also said new disposable income data led to downward revisions in the Coincident Index for the previous five months.
In currency trading, the Australian dollar opened lower on Thursday after better-than-expected manufacturing data in the U.S. encouraged investors to buy the greenback. In early trades, the local unit was trading in a range of US$0.7968-US$0.7970, down from Wednesday's close of US$0.7984-US$0.7987.
The major banks are trading mixed. Australia and NZ Banking Group is up 0.06% and Westpac is adding 0.36%, while Commonwealth Bank of Australia is down 0.41% and National Australia is losing 0.42%.
Resource stocks are trading higher on firmer base metal prices. Mining giant BHP Billiton is advancing 0.92% and rival Rio Tinto is gaining 2.04%. Among gold miners, Lihir Gold is advancing 1.40% and Newcrest Mining is adding 1.76%.
In the oil sector, Oil Search is down 0.19%, while Santos is adding 0.79% and Woodside Petroleum is gaining 0.56%. In the retail sector, Woolworths is adding 0.04% and David Jones is up 1.00%. Wesfarmers is down 0.32%.
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