The Australian equity market is set for a positive start to the day after overnight stocks bounced following three session in the red as positive news out of Germany, Italy and the US give investors hope that there is light at the end of the tunnel.
The Dow surged 275.56 points to finish the session at 11414.86, closing at session highs while the S&P500 (see above chart) index advanced 33.38 points to close at 1198.62.
Financial stocks led the way on the open of the US market after Bank of America rallied over 7 percent following a complete overhaul of their management team. Later in the session Italy's senate approved an austerity plan for about EUR50 billion in savings and additional tax revenue. These measures are designed to balance the budget in 2013 and help the government bring down Italy's enormous debt.
The USD was weaker against most of its trading counterparts as sentiment improved leading to an increase in risk appetite after a ruling by Germany's Federal Constitutional Court stated the EU bailout efforts for Greece were legal. The AUDUSD traded up from European session lows of 1.0595 to recent highs of 1.0661.
Gold traded down for the second straight session to lows of USD1793 per ounces as investors profit take and look to chase gains in the solid equities.
WTI oil traded up from overnight lows of 86.55 to settle at their highest level in more than a month, boosted by a sharp rally in the overnight equities markets.
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