The local market is improving for the first time this week and looking to snap its two day losing streak to start the week. The ASX 200 around midday is trading 53pts or 0.73% higher at 7,195. These moves follow what was a rather quiet session on Wall Street overnight as US markets returned from a long weekend.
The big news of the morning was the release of the March quarter GDP or economic growth figures by the Australian Bureau of Statistics (ABS). This showed that the national economy in the first three months of 2021 grew by 1.8% from the final three months of 2020. This was ahead of a 1.5% lift that economists were expecting. On a year ago, the economy grew by 1.1% which was also ahead of an anticipated 0.6% lift by economists. Importantly, the ABS noted that “Australian economic activity has recovered to be above pre=pandemic levels”.
There was not much of a reaction from financial markets with the Aussie dollar and ASX little changed following the release of the data. The Aussie dollar continues to hold around 77.6 US cents.
Helping to drive the Aussie market higher has been the rise of the resource stocks, which have been supported by the strength of commodity prices. Oil prices rose overnight on improving demand hopes as Brent crude hit a 2-year high. Santos (STO) is 5% higher while Woodside (WPL) rallies 4%.
Miners have also been well supported by a surge in iron ore prices last night. The price jumped by 10% in overnight trade and is back around US$209/tonne. BHP Group (BHP) is close to 3% higher while Rio Tinto (RIO) and Fortescue Metals (FMG) both lift near 2.5% each.
However, not all mining stocks are enjoying improvements so far. Gold stocks are trading lower on a small dip in the precious metal price. The healthcare, technology and communications are the main sectors in decline so far.
Travel stocks are faring relatively well despite the lockdown being extended in Melbourne for another 7 days. Regional Victoria will see restrictions ease from 11.59pm tomorrow night. Flight Centre (FLT) is 2.2% higher, Webjet (WEB) is gaining 2% and Qantas (QAN) is lifting 0.6%.
Published by CommSec