PERTH: The Australian sharemarket has rebounded from yesterday’s losses to rally 1.5 per cent at noon, as financial and resources stocks swing into the black.
The local market was following Wall Street, which finished with decisive gains on modestly higher US retail sales ahead of the Federal Reserve’s interest rate decision later this week.
At 12.05pm (AEST), the benchmark S & P/ASX200 rose 73.5 points, or 1.46 per cent, to 5091.9 points, while the broader All Ordinaries added 70.2 points, or 1.39 per cent, to 5116.8.
CMC chief market analyst Ric Spooner said the key focus now is the Fed, with opinion divided about whether it will announce an increase in US interest rates later this week.
“Last night’s US market moves appeared to be a logical response to the possibility that the Fed will begin the gradual process of lifting interest rates this week.”
Share markets rallied, reflecting solid growth in the US domestic economy and the potential for the Fed to increase certainty and reduce volatility by acting at the September meeting.
Mr Spooner said the solid lead from the US suggested a positive day for the local market, but warned the quarterly index futures expiry and associated adjustment of positions in the stock market introduced an element of uncertainty to the day’s trading.
In economic news today, Reserve Bank of Australia assistant governor for financial markets Guy Debelle told a conference in Sydney that there is a critical need to adjust to changes in the bond market.
