The Australian sharemarket is rallying as investors bet on an interest rate cut next week.
Gains among financial stocks have offset losses in the mining sector after the price of Australia’s largest export, iron ore, dropped below $US50 a tonne overnight.
The big banks, telcos and property trusts all performed strongly in morning trade, Options Xpress market analyst Ben Le Brun said.
“We’re defying the naysayers today and a lot of that would be pricing in a rate cut on Tuesday,” Mr Le Brun said.
“There might be further upside before the Reserve Bank’s rate decision on Tuesday.”
However, there was also the chance that some profit taking and position-squaring would occur in afternoon trade ahead of the four day Easter break.
The big banks were one of the biggest beneficiaries, with Commonwealth Bank adding 87 cents to $94.20, National Australia Bank was up 29 cents at $38.72, ANZ also gained 28 cents to $36.73 and Westpac was 32 cents stronger at $39.50.
Telstra gained three cents to $6.36.
But the big miners were under pressure as the iron ore price continued to struggle.
BHP Billiton had shed 14 cents to $30.21, Rio Tinto was down 67 cents at $55.74 and iron ore pure play Fortescue Metals lost seven cents to $1.82.
Meanwhile, the price of oil has rebounded, lifted by a report showing a decline in US crude production and a deadly explosion and fire on an oil platform in the Gulf of Mexico.
Woodside Petroleum was up 20 cents at $34.08 and Santos was two cents higher at $6.95.
In other news QBE jumped 40 cents to $13.18 as the insurance giant announced it was considering lifting its dividend payout ratio after returning to profitability in a $1 billion turnaround in February.
Shares in mining equipment and rolling stock supplier Bradken have soared 18 per cent to $2.30 on takeover speculation.
KEY FACTS
* At 1210 AEDT on Thursday, the benchmark S&P/ASX200 index was up 41.1 points, or 0.7 per cent at 5,901.
* The broader All Ordinaries index was up 40.3 points, or 0.69 per cent, at 5,873.2.
* The June share price index futures contract was 52 points higher at 5,900, with 11,317 contracts traded.
* National turnover was 559.4 million securities worth $1.47 billion.
