RTTNews - A strong finish overnight on Wall Street and positive comments from the Reserve Bank of Australia Governor about a global economic recovery set the tone for a positive start in the Australian stock market on Tuesday. Higher copper and oil prices aided the cause of energy and materials stocks.
Financials, industrials, consumer staples, consumer discretionary and utilities are also trading firm.
The benchmark Australian index S&P/ASX 200 opened with a positive gap and is currently trading firm at 3,810.60, up 75 points over its previous close. The All Ordinaries index is up 74 points at 3,795.60.
Materials stock BHP Billiton is up 2.6% on higher copper prices, buoyed by hopes of an improvement in U.S. housing market. Among other stocks in the materials space, Orica is trading 3.3% up and Rio Tinto is up 4.25%.
In the energy space, Woodside Petroleum is trading 3.9% up, Origin Energy is up 2.1% and Santos is trading higher by 2.4%.
In the banking sector, ANZ Bank is up 1.9% and Commonwealth Bank of Australia is gaining 2.5%. National Bank of Australia and Westpac are up by around 2%. Diversified financials stock Macquarie Group is up 2.8%.
Among insurance stocks, QBE Insurance Group is trading 2.75% up. Capital goods issue Leighton Holdings is gaining 2.25%.
In the currency market, the Australian dollar is trading at 0.7639 to the U.S. dollar.
Among other markets in the Asia-Pacific region, New Zealand and Korea are trading sharply higher. The Japanese market is also trading firm with its benchmark Nikkei 225 gaining almost 3%.
On Wall Street, stocks rallied on Monday, bolstered by hopes about the housing market. A report from the National Association of Home Builders said its index of homebuilder sentiment rose to 16 in May, compared to a level of 14 in April. The figure was the best reading since September, fueling speculation that the housing sector is bottoming and economic recovery may be around the corner. Further, the report indicated that attitudes of home builders improved for both the present situation and for the next several months.
Better-than-expected earnings from home improvement retailer Lowe's also contributed to the positive sentiment.
The major indices closed prominently higher, with the Dow closing up 235.44 points at 8504.08, the Nasdaq finishing up 52.22 points at 1732.36, and the S&P 500 closing higher by 26.83 points at 909.71.
Wall Street now turns its attention to the Commerce Department data on housing starts for April. Although the figures are expected to rise, economists are still uncertain that a trough has been reached. According to Wachovia Securities, housing starts may hover around the half-million mark for one more month before beginning to slowly climb in the second half of the year.
It was a mixed close for stock markets across the Asia-Pacific region on Monday. Japan's benchmark Nikkei 225 Index fell by 2.4 percent, while Hong Kong's Hang Seng Index climbed 1.3 percent. In India, the decisive victory of the Congress Party in recent elections buoyed up stocks and lifted the key indices up by over 17 percent.
Major European markets all closed higher on the day. The French CAC 40 Index and the German DAX Index closed up 2.4 percent, while the U.K.'s FTSE 100 Index finished up by 2.2 percent.
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