RTTNews - The Australian stock market opened on a high note Monday with investors going on a buying spree on renewed optimism about a global economic revival on the back of better-than-expected existing U.S. home sales data and relatively optimistic economic comments from Federal Reserve Chairman Ben Bernanke.
With stocks across various sectors surging higher on strong buying support, the benchmark S&P/ASX 200 index is currently trading up by 107.1 points or 2.5% at 4,397.7. The broader All Ordinaries index is up by 102.3 points or 2.4% at 4,408.
The Australian market had ended sharply lower on Friday, despite positive closing in Wall Street a day earlier, dragged down by disappointing earnings, buying of Telstra stock at a discount and concerns about Chinese banks. The benchmark S&P/ASX 200 index ended lower by 86.9 points, or 1.99%, at 4,291, while the All-Ordinaries index closed with a loss of 85.7 points or 1.95% at 4,305.7.
Materials stocks are on a roll, with leading miners Rio Tinto and BHP Billiton leading the charge in morning trades. Rio Tinto is currently up by 4.4%, while BHP Billiton is trading with a 3.5% gain. Bluescope Steel, Fortescue Metals, Incitec Pivot, Lihir Gold, Onesteel and Orica are trading higher by 2%-4.4%, while Newcrest Mining is up by 1.7%.
In the energy space, Woodside Petroleum, Santos, Oil Search and Origin Energy are trading up by 2%-4%.
Among bank stocks, ANZ Bank is up by 2.6%, Commonwealth Bank of Australia is gaining 2.2%, National Australia Bank is up by about 3% and Westpac is up with a gain of 1.7%. Macquarie Group is trading up by around 4.5%.
Consumer discretionary, industrials and technology stocks are up sharply, while healthcare, information technology and consumer staples stocks are trading mixed.
Toll road operator ConnectEast Group says it is working to grow traffic and revenue on its EastLink toll road, after reporting an annual net loss of A$531.58 million. The group also announced an equity raising of up to A$421 million as it posted the results for the year ended June 30, 2009, which compares to a net loss of A$9.33 million in the prior year. ConnectEast stapled units are in a trading halt, having last traded at 39 cents.
Austereo Group Ltd, Australia's largest radio network, says its annual profit has fallen 15.2% and it is bracing for a challenging 2010. In a statement to the stock exchange today, Austereo said its full year profit was A$41.41 million, down 15.2% from a profit of A$48.82 million in 2007/08. The company said underlying revenues from continuing activities was A$258.92 million, down 2.9%. The stock is currently trading nearly 2% down from its previous close.
In economics news, the Australian Bureau of Statistics releases new motor vehicle sales data for July today.
In the currency market, the Australian dollar opened higher this morning as a plan to remove tax on domestic government securities increased demand for the currency. In early trading, the Aussie was quoting at US$0.0.8360/64, up from Friday's close of US$0.8293/97. The Australian dollar is currently trading at 0.8402 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan is up sharply, with its benchmark Nikkei moving up by as much as 3.25%. New Zealand, Korea and Singapore are also trading with impressive gains. Stock markets across the region had turned in a mixed performance on Friday.
On Wall Street, stocks saw a notably strong outing on Friday, with early buying interest spearheaded by better than expected existing home sales data and relatively optimistic economic commentary from Federal Reserve Chairman Ben Bernanke.
The Dow closed up by 155.91 points or 1.7% at 9,505.96, the Nasdaq climbed by 31.68 points or 1.6% to 2,020.90 and the S&P 500 moved up by 18.76 points or 1.9% to 1,026.13.
Major major European markets all closed substantially higher on Friday, with the French CAC 40 index and the German DAX index rising by 3.2% and 2.9% respectively, while the U.K.'s FTSE 100 index finished up by 2%.
Crude oil prices surged on Friday on hopes of increased energy demand. After ending Thursday's trading down US$0.92 at US$72.91 a barrel, crude for October delivery ended its first day as the front-month contract up US$0.98 at US$73.89 a barrel. The price of oil rose as high as US$74.72 a barrel before giving back some ground.
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