Australian shares are firmer as buoyant global equity markets boost resource stocks and investors rediscover their love of banks.
The resource giants BHP Billiton and Rio Tinto are outperforming the overall market, despite a drop in base metal prices, after US and European equity markets posted gains, Patersons Securities economist Tony Farnham says.
“The major resource guys were well supported in overnight markets,” he said.
“In the London Metal Exchange market, the base metals went lower and gold and West Texas Intermediate, the oil side of things, they were basically unchanged.”
BHP Billiton added 46 cents, or 1.23 per cent, to $37.98 while Rio Tinto found $1.21 or 1.88 per cent, to $64.92.
Iron ore miner Fortescue added 19 cents, or 3.57 per cent, to $5.51 while gold miner Newcrest added 15 cents, or 1.5 per cent, to $10.15 despite a drop in the gold price.
On Monday, three of the big four banks slipped despite Westpac posting a record cash profit of $7.1 billion.
But on Tuesday, they were all stronger with National Australia Bank 23 cents higher at $35.66, Commonwealth Bank up 58 cents at $76.68, ANZ 30 cents better at $33.81 and Westpac 31 cents stronger at $34.47.
“There was some reassessment of the selling in the banks yesterday, thinking that went a little bit oversold,” Mr Farnham said.
Telstra was half a cent firmer at $5.145 after the telco giant announced it would list its Chinese car sales website Autohome on the New York Stock Exchange.
Trading volumes are thinner than usual because of the Melbourne Cup, while most economists expect the Reserve Bank of Australia will leave the cash rate unchanged at 2.5 per cent when it announces its decision on Tuesday afternoon.
KEY FACTS
* At 1200 AEDT on Tuesday, the benchmark S&P/ASX200 index was up 40 points, or 0.74 per cent, at 5,430.5
* The broader All Ordinaries index was up 39.1 points, or 0.73 per cent, at 5,423.3.
* The December share price index futures contract was 37 points higher at 5,417, with 8,697 contracts traded.
* National turnover was 576.3 million securities worth $894.9 million.
