The Australian stock market opened on a positive but slightly listless note on Monday with strong cues from Wall Street triggering some modest buying in early trading. However, with participants resorting to selling at higher levels, the market has pared its early gains now.
Energy stocks are in focus. Healthcare, materials and financials stocks are trading modestly higher, while information technology, telecommunications and consumer staples stocks are exhibiting some weakness.
The Australian benchmark index S&P/ASX 200, which moved on to 3,960, is currently trading at 3,944, up 2.30 points over its previous close.
Materials stock BHP Billiton is trading 0.5% up while Rio Tinto is down marginally. In the energy space, Worleyparsons is trading nearly 5% up and Woodside Petroleum is up 0.2%.
In the banking space, Commonwealth Bank of Australia is down by 1.4%, while ANZ Bank and National Bank of Australia are trading higher by 0.4% and 0.2% respectively.
Pharma stock CSL is up 1.6% and capital goods issue Leighton Holdings is trading 1.6% up. Among diversified financials, Macquarie Group is up 1.5%.
In the currency market, the Australian dollar is trading at 0.7676 to the U.S. dollar.
Among other markets in the Asia-Pacific region, New Zealand is trading higher, with the NZX 50 index trading 0.83% up at 2,896.87. The Korean market is trading with modest gains. The Japanese market has also opened on a firm note. The Nikkei 225 benchmark is currently trading 0.65% up.
Better than expected jobs data and a positive reaction to the results of the financial stress tests lifted stock prices on Wall Street Friday. Despite some profit taking at higher levels, the major averages ended the session on a high note.
According to a report from the Labor Department, employment fell by 539,000 jobs in April following a revised decrease of 699,000 jobs in March. The decrease in employment marked the smallest drop in jobs since October of 2008.
While the decrease was smaller than the loss of 600,000 jobs expected by economists, upward revisions to the number of job losses in February and March partly offset some of the optimism about the labor market.
The Labor Department also said that the unemployment rate rose to 8.9 percent in April from 8.5 percent in March. With the increase, which came in line with economist estimates, the unemployment rate rose to a new 25-year high.
Traders also reacted positively to the official results of the government's stress tests of the nation's 19 largest financial firms, which were released after the close of trading on Thursday.
U.S. bank regulators said about half of the country's biggest financial institutions need to improve their capital positions in order to ensure that they can weather a further downturn in the economy. The results of the stress tests showed that 10 of the 19 banks tested need to raise a total of $74.6 billion. The banks involved in the exercise account for two-thirds of the assets and more than half of the loans in the U.S. banking system.
The Dow closed up 164.80 points or 2 percent at 8,574.65, the Nasdaq closed up 22.76 points or 1.3 percent at 1,739.00 and the S&P 500 closed up 21.84 points or 2.4 percent at 929.23.
Stock markets across the Asia-Pacific region closed mostly higher on Friday, reacting positively to the U.S. stress test results. Japan's benchmark Nikkei 225 Index closed up 0.5 percent, at a six-month closing high.
European stocks also turned in strong performances, although they ended the session off their best levels of the day. The U.K.'s FTSE 100 Index rose 1.4 percent, while the French CAC 40 Index and the German DAX Index closed up 1.9 percent and 2.3 percent, respectively.
U.S. economic data is likely to attract some attention next week, with reports on retail sales, producer and consumer price inflation, and industrial production likely to be in focus. Traders are also likely to keep a close eye on the weekly jobless claims report.
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