RTTNews - The Australian stock market opened on a bright note Thursday, with the overnight surge on Wall Street triggering some strong buying in energy, materials and financials stocks. Healthcare, industrials and technology stocks are also trading firm.
The Australian benchmark index S&P/ASX 200 is currently trading at 4,395.9, up 52.8 points or 1.2% over its previous close. The broader All Ordinaries index is up by 53.1 points or 1.2% at 4,399.
On Wednesday, the S&P/ASX 200 index had ended up 11.1 points or 0.26% at 4343.1 while the All Ordinaries index moved up by 11.5 points or 0.27% to 4345.9 points.
In the banking space, Commonwealth Bank of Australia is gaining nearly 3.5% while ANZ Bank, National Australia Bank and Westpac are trading higher by 2.3%-2.5%. Diversified financials major Macquarie Group is up by over 2%.
Among mining majors, Rio Tinto is up by 1.3%, while BHP Billiton is exhibiting some weakness. Bluescope Steel, Fortescue Metals, Incitec Pivot and Orica are trading higher, while Newcrest Mining and Lihir Gold are trading weak.
Energy major Santos has announced it has discovered gas in the Browse Basin off Western Australia. The Burnside-1ST1 exploration well in permit WA-281-P has struck a 65 metre gross gas column in the primary target, which is the Brewster Sandstone. Santos says various tests have indicated there is gas throughout the fairly low permeability sandstone interval and that there is potential for the gas column to extend below the base of the sand. Santos is currently trading nearly 2% up.
Among other energy stocks, Woodside Petroleum and Oil Search are also trading firm this morning.
Coca-Cola Amatil expects to post high single-digit profit and earnings growth for the second half of 2009 after delivering a 10.4 per cent lift in profit for the first half. The company posted net profit after tax of A$189.8 million in the six months to June 30, 2009. The stock is edging up by 1.2% this morning.
In economic news, the Australian Bureau of Statistics releases average weekly earnings data for the May quarter today, and the Housing Industry Association issues its housing affordability report for the June quarter.
The Melbourne Institute will publish its survey of consumer inflationary expectations for August and, with Westpac, it will release its survey of consumer unemployment expectations for August.
In the currency market, the Australian dollar opened higher today with upbeat comments from the US central bank on an economic recovery giving a lift to high-yielding assets such as equities and the local currency. In early trading this morning, the Aussie was quoting at US$0.8330/35, up 1.78% from Wednesday's close of US$0.8185/89. The Australian dollar is currently trading at 0.8351 to the U.S. dollar.
Among other markets in the Asia-Pacific region, New Zealand, Japan, Singapore and Taiwan are trading notably higher. Korea is also trading firm. Stock markets across the region had finished markedly lower on Wednesday.
On Wall Street, shrugging off a report that showed U.S. trade deficit widened in June, traders stayed bullish on Wednesday after the Federal Open Market Committee announced that it was maintaining the target range for its benchmark federal funds rate at zero to 0.25% and repeated its belief that low rates will persist for what it calls an extended period. The central bank added that economic activity is leveling out.
The central bank also said it will gradually slow the pace of treasury purchases and expects that the full amount of US$300 billion will be purchased by the end of October.
Going into the meeting, the Fed was universally expected to leave rates unchanged, but there was some speculation that the central bank could announce the end of its program to buy treasury bonds, a move it had undertaken to further stimulate the economy.
The Dow jumped by 120.16 points or 1.3% to 9,361.61, the Nasdaq moved up by 28.99 points or 1.5% to 1,998.72 and the S&P 500 surged 11.46 points or 1.2% to 1,005.81.
Major European markets closed considerably higher, with the French CAC 40 index and the German DAX index rising by 1.5% and 1.2% respectively, while the U.K.'s FTSE 100 index posted a gain of 1%.
Oil prices closed higher, lifted by a Wall Street rally as the market shrugged off a larger-than-expected jump in US crude inventories that fueled worries about weak demand. Light sweet crude for September delivery, settled at US$70.16 a barrel, up 71 cents from Tuesday's close.
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