The Australian stock market is trading higher on Wednesday with investors indulging in some strong buying in several front line stocks from across various sectors, tracking cues from the U.S. and European markets where stocks posted gains overnight amid hopes of further stimulus.
A better than expected report on Australian services sector activity is also contributing to the buoyant mood in the market.
The benchmark S&P/ASX 200 index is up 34.8 points or 0.8 percent at 4,162. The broader All Ordinaries index is trading at 4,202, up 35.6 points or 0.8 percent from its previous close.
Mining stocks are moving higher on strong buying support. Industrial, consumer staples and information technology stocks are also trading firm, while financial and healthcare stocks are trading mixed.
Energy stocks are up sharply following the owners of the Australia Pacific liquefied natural gas project in Queensland making a final commitment to the A$23 billion project.
Origin Energy said the company and its joint venture partners ConocoPhillips as well as China Petrochemical Corp have approved a final investment decision on the second of two development stages of the project.
Origin Energy shares are up nearly 4.5 percent. Woodside Petroleum, Santos and Oil Search are up 2 to 2.5 percent, while Caltex Australia is trading higher by about 1.8 percent.
Top miners BHP Billiton, Rio Tinto, Fortescue Metals and Newcrest Mining are all trading in positive territory with notable gains.
Among bank stocks, Commonwealth Bank of Australia and National Australia Bank are up 0.6 percent and 0.9 percent, respectively. ANZ Bank and Westpac are trading marginally down.
Beach Energy is up with a gain of over 5.5 percent. Oz Minerals, Boart Longyear, Boral and Regis Resources are up 3 to 4 percent.
Incitec Pivot, Arrium, Aurora Oil & Gas, Atlas Iron, Alumina, Paladin Energy, Perseus Mining and Primary Healthcare are all trading higher by 2 to 3 percent.
On the economic front, the Australian Industry Group said that the index measuring the service sector in Australia came in with a score of 48.8 in June, sharply higher than the May reading of 43.5. Among the individual sub-categories, recreation, health, community service and transportation all saw expansion, while retail trade, wholesale trade and accommodations saw contraction.
On Wall Street, stocks moved mostly higher on Tuesday, after initially showing a lack of direction. The markets benefited from an upbeat report on factory orders as well as strong commodities prices. Nonetheless, trading activity remained relatively subdued, with traders looking to get a head start on the Independence Day holiday on Wednesday.
The major averages saw some volatility in the final hour of trading but closed firmly in positive territory. The Dow rose 72.4 points or 0.6 percent to 12,943.8, the Nasdaq advanced 24.9 points or 0.8 percent to 2,976.1 and the S&P 500 climbed 8.5 points or 0.6 percent to 1,374.
Major European markets also ended on a firm note on Tuesday. While the U.K.'s FTSE 100 index gained 0.8 percent, the French CAC 40 index and the German DAX index jumped by 1 percent and 1.3 percent, respectively.
U.S. crude oil futures ended at six-week high on Tuesday on supply concerns, as Iran stepped up its rhetoric over the Strait of Hormuz while continuing its missile drills in the area.
Oil prices were also helped by increased risk-taking sentiment, with investors anticipating additional stimulus measures to help boost growth from the European Central Bank and other central banks. Crude for August delivery jumped $3.91 or 4.7 percent to close at $87.66 a barrel on the New York Mercantile Exchange.
by RTT Staff Writer
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