The Australian stock market was trading sharply higher on Thursday, extending Wednesday's gains, despite a mixed lead from Wall Street overnight. Major miners and energy companies were higher in early trade on the back of stronger commodity prices. At 9:15 p.m. ET, the benchmark S&P/ASX 200 index was gaining 93 points or 2.42% to 3,939, after closing up 1.34% on Wednesday. The broader All Ordinaries index was advancing 92 points or 2.42% to 3,898.
In the currency market, the Australian dollar opened stronger on Thursday as key commodity prices jumped. The Aussie opened at US$0.6705-0.6714, up from Wednesday's close of US$0.6406-0.6413.
On Wall Street, U.S. stocks saw substantial volatility on Wednesday and moved higher after the afternoon's announcement of a rate reduction by the Federal Reserve, but plunged in the final half hour, with the major averages eventually ending the session mixed. The U.S. Federal Open Market Committee, the policy-making arm of the Federal Reserve, revealed that it lowered its target for the federal funds rate by 50 basis points to 1%, reducing the key rate to its lowest level since June of 2004. The Dow closed down 74 points or 0.82% at 8,991, the Nasdaq gained 8 points or 0.47% to close at 1,657, and the S&P 500 fell 10 points or 1.11% to finish at 930.
On the economic front, a private sector barometer of Australia's business conditions registered positive readings in August. The Conference Board reported that its leading index for Australia increased 0.4% in August, the sixth straight month of increases. The coincident index, which measures current economic activity, increased a modest 0.1% in August.
Among banking stocks, Commonwealth Bank of Australia lost 1.61%, and ANZ Banking Group edged down 0.35%, while National Australia Bank rose 2.12%. Westpac was unchanged, investment bank Macquarie Group was up 1.72%, and St. George bank gained 2.02%.
Australia's second biggest bank, Westpac Banking increased full-year cash earnings by 6% to A$3.73 billion, on strong loan and deposits growth and in line with analysts' estimates, ahead of completing its takeover of St George Bank.
In the resources sector, index leader BHP Billiton advanced 4.52% and Rio Tinto gained 5.88%. Gold miners were stronger, after gold closed higher for a fourth straight session on Wednesday. Sino Gold soared 17.32%, Lihir Gold climbed 13.95% and Newcrest Mining advanced 5.45%.
On Wednesday, crude oil futures for December delivery closed sharply higher, snapping a losing streak of four sessions, as traders considered the Federal Reserve's interest rate decision and a smaller-than-expected build in inventories. According to the Energy Information Administration, U.S. commercial crude oil inventories increased by 500,000 barrels in the week ended October 24.
Oil closed up $4.77 at $67.50 a barrel on the New York Mercantile Exchange, after hitting an intraday high of $68.98. In the Asian session Thursday, crude was up $0.70 at $68.20 in electronic trading at 9:16 p.m. ET.
Among energy stocks, Oil Search soared 19.41%, Woodside rose 6.25% and Santos climbed 10.71%.
In the retail sector, David Jones fell 1.96%, while giant retailer Woolworths gained 2.50%, and Coles' owner Wesfarmers rose 3.49%.
BlueScope Steel rose 5.9% after it booked a net profit after tax for the first quarter of A$430 million, outperforming the first half results of last year, boosted by strong global steel demand and prices.
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