RTTNews - Taking cues from Wall Street, where stocks surged higher overnight on a slew of encouraging earnings reports and higher crude oil prices, the Australian stock market opened on a bright note on Thursday. However, with a few front line stocks facing some resistance at higher levels, the market has given up some gains in subsequent trades.
Energy, material, industrial and financial stocks are trading firm while shares from healthcare and utilities section are exhibiting some weakness.
The benchmark S&P/ASX 200 index, which moved up to 4,425.1 earlier this morning, is currently trading at 4,395.4, up 21.6 points or 0.5% over its previous close. The broader All Ordinaries index is up by 22.2 points or 0.5% at 4,409.7, well off its earlier high of 4,437.2.
On Wednesday, the S&P/ASX 200 index had ended down 7.8 points or 0.2% at 4,373.8, while the All Ordinaries index closed up 1.6 points or 0.04% at 4,387.5.
Among key energy stocks, Woodside Petroleum is gaining 4.5%, Santos is up by 1.7%, Oil Search is trading higher by 3.3% and Origin Energy is up by nearly 2.5%.
In the materials space, BHP Billiton is up by 1.1%, Fortescue Metals is trading higher by 1.8%, Bluescope Steel is gaining 1.3% and Orica is trading higher by 2.2%. Newcrest Mining is up by a modest 0.7%. Rio Tinto, however, is down with a modest loss.
Bank stocks ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation are trading with notable gains. Macquarie Group is up by 2.7% over its previous close.
QBE Insurance Group reported a 19% rise in net profit for the six months to June 30 to A$1.018 billion despite volatile conditions. QBE attributed the profit jump to strong premium growth, a weaker Australian dollar, the impact of its 2008 acquisitions and profits on the repurchase of QBE debt securities. The insurance stock is up by over 4.5% on its previous close.
Brambles Ltd has posted a 30% drop in annual net profit and forecast a return to its traditional sales revenue strength as the global economy recovers. The logistics group posted net profit for the year to June 30 of US$452.6 million, or A$545.89 million, down from US$648.7 million in the previous-year corresponding period. Brambles reported underlying profit of US$900.6 million, or A$1.09 billion, down 8% from the previous year on a constant currency basis. The stock is currently trading up by 5.3%.
Shares of engineering and infrastructure services group Downer EDi Ltd are up sharply on strong results. The company posted a 14% rise in annual net profit to A$189.4 million and forecast 2009/10 net profit to grow about 5%. The stock is currently up by around 10.5%.
In economic news, the Australian Bureau of Statistics releases international merchandise imports data for July, and the Reserve Bank of Australia issues its monthly bulletin today.
In the currency market, the Australian dollar opened higher today following a rally in equity markets and higher commodity prices. In early trading this morning, the Aussie was quoting at US$0.8287/89, up from Tuesday's close of US$0.8207/09. The Australian dollar is currently trading at 0.8280 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan, New Zealand, Korea and Singapore are trading modestly higher. Stock markets across the region had finished notably lower on Wednesday.
On Wall Street, stocks recovered from early weakness and finished notably higher on Wednesday, due largely to a jump in oil demand. Despite moving in a choppy fashion during the later part of the session, the major averages finished near their best levels of the day. The Dow closed up by 61.22 points or 0.7% at 9,279.16, the Nasdaq moved up by 13.32 points or 0.7% to 1,969.24 and the S&P 500 ended up by 6.79 points or 0.7% at 996.46.
Major European markets ended the day little changed, with the French CAC 40 index and the U.K.'s FTSE 100 index finishing just below the unchanged mark, while the German DAX index fell by 0.4%.
Crude oil soared to its best close in more than two months on Wednesday after an Energy Information Administration report showed that crude inventories unexpectedly fell sharply in the recent week. Light sweet crude for September settlement rallied to US$72.42 a barrel, up US$3.23 on the session. Prices reached as high as US$72.80 earlier in the day.
The EIA said crude oil inventories decreased by 8.4 million barrels, while analysts expected to see an increase of about 1.1 million barrels for the week. At 343.6 million barrels, however, crude oil inventories remain above the upper boundary of the average range for this time of year.
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