SYDNEY: The Australian share market has opened more than one per cent higher following a strong lead from Wall Street and the release of the US Federal Reserve’s September policy meeting minutes.
The US dollar sagged after the minutes showed Fed members are waiting to see how much the global economic slowdown is affecting the American economy, helping boost commodities such as oil and iron ore priced in US dollars.
Resources and energy companies on the Australian Stock Exchange got a big bounce as a result but IG Markets analyst Angus Nicholson sounded a note of caution.
“The outlook for oil and commodities is still pretty negative: There’s still a huge amount of oversupply in both those markets and its going to take a while yet for that to come out of the market,” Mr Nicholson said.
“There’s quite a risk that the strong gains we’ve seen in the materials and energy sector of late are primed for reversal in the near term, if not today then next week.”
The benchmark S&P/ASX200 index could be set to extend its winning streak to five days, which Mr Nicholson said may not be sustainable.
“It is looking a bit risky,” said Mr Nicholson.
“We’re now reaching levels we’ve not seen on the ASX since August when the selloffs started.”
At 1030 AEDT, Rio Tinto was up $1.76, or 3.31 per cent, to $54.94, while fellow miner BHP Billiton was up 65 cents, or 2.6 per cent, to $25.65. Fortescue Mining Group gained eight cents, or 3.62 per cent, to $2.29.
Energy giant Santos surged 31 cents, or 5.64 per cent, to $5.81 and Origin Energy was up 25 cents, or 3.89 per cent, to $6.68.
The big four banks also gained strongly, with Commonwealth Bank up 55 cents to $75.92, ANZ up 50 cents to $28.43, NAB up 40 cents to $31.70 and Westpac up 37 cents to $30.91.
