Local stocks are moving higher for a second consecutive session in early trade, on the back of positive offshore moves after the European Central Bank announced plans to tackle the Eurozone crisis head on. The ECB agreed to launch a new bond buying program, designed to restrain borrowing costs for embattled nations. The move saw investors willing to take on more risk overnight, sending European shares higher and Wall Street finish at a four year high. At lunchtime in the East, the All Ordinaries Index (XAO) is firmer by 20pts or 0.5pct to 4351.6.
The main indicator of the Australian Securities Exchange (bottom R) is seen in red shortly after the local market opened in Central Sydney October 4, 2011. Australian stocks eased 0.6 percent on Tuesday, pressured by falls in global equities markets in a fresh flight from riskier assets, but losses were limited after steep declines on Monday. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)
The iron ore price rose along with a basket of other commodities, with iron ore finishing the session at US$87 a metric tonne. Shares in Fortescue Metals Group (FMG) which have been hit hard this week, are up 3.5pct in early trade to $3.08.
Financial stocks are generally firmer, with shares in Macquarie Group (QMG) up 1.1pct to $27.87.
Qantas (QAN) is one of the best performers, continuing to rise in the wake of its proposed alliance with Emirates, announced yesterday. QAN shares are firmer by 4pct to $1.2475 in early trade.
There has been a switch out of defensive health care stocks which held up earlier in the week when the market was trading in the red. Shares in CSL Limited (CSL) are down 1.3pct to $44.51 while Cochlear (COH) is weaker by 1pct to $67.62.
The ECB decision has seen the Euro and commodity currencies like ours rise against the greenback, on hopes the bond buying program will provide greater stability for the global economy. The AUD rallied to 103 US cents in New York trade, following a week where we saw it dip below 102 US cents. At lunchtime in the East the AUS is worth US102.84c, £0.6458 and €81.42c.
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