SYDNEY: Australian stocks started 0.4 percent higher because of strong lead from Wall Street, while broad fall in the prices of copper, iron ore and oil had an effect on some energy and material stocks.
At the official 10.15am (AEDT) market open, the benchmark S&P/ASX200 index was up 21.7 points, or 0.4 per cent, to open at 5,416.2 points, while the broader All Ordinaries index was up 19.9 points, or 0.37 per cent, to 5,389.4 points.
On Friday, the Dow Jones Industrial Average in the US gained for seventh straight session to a new all-time high, aided by strong economic growth figures for the September quarter.
However, CMC Markets chief market strategist Michael McCarthy said that downward pressure on industrial commodities would affect energy and material stocks and likely offset gains made elsewhere.
“We’ve got conflicting currents for traders today. It’s a tough day to make a call, because although shares are generally supportive — we’ve seen good gains around the globe — that pressure on industrial commodities has returned. Energy and copper prices are down, iron ore has fallen with it,” he said.
“That pressure on material and energy sectors, which is likely to see significant falls today, will probably offset any positives that we might see in other sectors.”At the open, materials stocks were boosted 1.13 per cent as a sector. BHP Billiton appeared to weather the downturn, firming 1.17 per cent to $29.31, as did Rio Tinto, which lifted 1.5 per cent to $57.44. Fortescue’s share price climbed 2.36 per cent to $2.60.
But it was a different story for the energy sector, which dipped by 0.46 per cent. Santos lost 0.48 per cent to $8.35 on the back of declines in the oil price. US benchmark West Texas Intermediate for February delivery dropped $US1.11 to finish at $US54.73 a barrel on the New York Mercantile Exchange on Friday. Similarly, Woodside Petroleum lost 0.47 per cent to open at $37.97, and Beach Energy shaved off 1.93 per cent at $1.01. Oil Search bucked the trend, inching up 0.13 per cent to $7.91.
It was a solid day for financial stocks, which rose by 0.32 per cent. ANZ lifted 0.53 per cent to $32.17, Commonwealth Bank firmed 0.6 per cent to $85.43, NAB’s share price increased 0.36 per cent to $33.50 and Westpac opened 0.91 per cent higher at $33.20.
Telstra lifted 0.76 per cent to $5.95.
Consumer staples were up 0.55 per cent, with Woolworths lifting 0.82 per cent to $30.75 and Wesfarmers rising by 0.43 per cent to $42.10.
One of the biggest movers was biotech company Pharmaxis, which gained 27.27 per cent to 14c.
Mr McCarthy said: “So far in futures we did see a good start, but already those gains have been erased. I think nervousness about the outlook, particularly for oil, will continue to weigh on our markets and could see them finish in negative territory today.”
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