SYDNEY: The Australian share market has opened higher after Beijing announced measures to stabilise its equity markets, a move which also contributed to a boost in iron ore prices overnight.
At the 10.15am (AEST) official market open, the benchmark ASX 200 index had risen 47.6 points, or 1 per cent, to 5078 points, while the broader All Ordinaries lifted 45.7 points, or 0.9 per cent, to 5096.7.
Iron ore ticked up $US1 to $US56 a tonne in China’s Tianjin spot market overnight after China’s government revealed measures to boost equity markets following yesterday’s 2.5 per cent fall in the Shanghai Composite Index.
IG chief market strategist Chris Weston said investors would look to Chinese bourses for guidance today.
“It’s all eyes on China again today, with the local markets scrambling for some sort of lead and inspiration,” he said.
“…[I]t would not be outrageous to think we could see an intraday volatility pick up after the open of the Chinese markets.”
Rivkin Securities chief executive Scott Schuberg said there was potential for activity despite largely quiet overnight leads.
European shares rose slightly on Monday but US markets were closed for the Labor Day long weekend.
World oil prices fell by about 4 per cent on Monday, hit by the weakness in Chinese equities and the modest downgrades to Chinese growth for 2014 — although volumes were light due to the US holiday.
“Buying opportunities are plentiful as the ASX remains depressed and the big four banks’ dividend yield rises,” Mr Schuberg said.
Locally, in economic news today, the National Australia Bank releases its monthly business survey while, overseas, China is due to report trade data.
