Australian shares are improving for the sixth time in seven sessions, with the All Ordinaries Index (XAO) edging higher by 0.6 per cent at lunch. Former treasury secretary, Larry Summers has withdrawn from the race to head the US central bank this morning.
Tim Wimborne / Reuters
People look at market display indicators through the window of the Australian Stock Exchange in Sydney
Summers was considered to be one of the more hawkish candidates (not keen to continue stimulus and low interest rates for extended period). The Fed's vice-chair, Janet Yellen has now become the frontrunner to fill the top position of Fed President. She is more likely to stick to Bernanke's plan of gradual QE (quantitative easing) tapering. This has pushed the greenback lower and the Australian dollar higher.
Last week was all about better than expected Chinese economic news, which helped lift local shares by 1.3 per cent over the past five sessions. The focus this week will be on the US central bank's two day meeting on Tuesday and Wednesday. The Fed will need to decide if tapering stimulus is going to take place this month. It is likely that the US central bank will reduce QE by around US$10 billion this month, but will make sure to highlight its dedication to playing a supportive role for the American economy.
The mining sector is adding to last week's 1 per cent rise, with Newcrest Mining (NCM) up 5.74 per cent. NCM last week slumped by 6.1 per cent, partly held back by a weaker gold price.
The major banks are continuing on their impressive run, with the big four up by as much as 1.3 per cent. National Australia Bank (NAB) is the standout.
Around 688 million shares have changed hands, worth $1.49 billion. 475 stocks are higher, 342 stocks are in the red while 308 stocks are unchanged.
No major data is scheduled for release today locally or across the region. The Japanese sharemarket will be closed today due to a public holiday. South Korean markets will be shut for Chuseok on Wed-Friday. The Chinese market will be closed on Thursday and Friday while stocks in Hong Kong won't be trading on Friday.
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