Mid Session Report (12:00 AEDT)
Buyers were able to make an impression on the ASX200 in early trade on Tuesday after the index shed 1.76% in the last 2 days. The improved tone saw every ASX sector trade higher over the course of the morning. The positive momentum was dominated by Materials and Financials, helped by economic news out of the US which revealed a better than expected reading on industrial production which rose by 0.6% in February, above forecasts for a 0.1% gain.
Gold stocks have been well supported in recent days reflecting demand for safe havens in the face of continuing tensions between the Ukraine and Russia. Overnight however the yellow metal faded. Comex gold futures price eased from six-month highs losing US$6.10 an ounce or 0.4% to US$1,372.90 per ounce. Pressure remained on gold in Asian trade on Tuesday. As a result gold producers were lower at lunchtime. Newcrest Mining (NCM) shares were at $11.55, down 61 cents or 5 per cent. Shares in Kingsgate Consolidated (KCN) were in a trading halt. The miner announced it will raise as much as $59.4 million from investors through placement and entitlement offer.
Energy stocks were well supported despite an easing in the price of oil. World oil prices eased on Monday as investors concluded that there was a reduced likelihood of major supply disruptions in Europe following the Crimean election.
In company news David Jones (DJS) and Myer (MYR) were in focus ahead of half year results due from both companies over the next two days. DJS opened the door to a proposed merger with Myer announcing the appointment of consultants to review the proposal. David Jones shares were at $3.31, up 2 cents or 0.76 per cent. Myer shares were at $2.65 down 1 cent or 0.38 per cent.
The minutes of the RBA March board meeting released this morning added weight to the case for rates remaining on hold and the possibility that the low in the rate cycle has been reached. The central bank reiterated its stance that the cash rate will stay at its current level of 2.5 per cent ''for some time if the economy was to evolve broadly as expected''. The Australian dollar rose above $US 0.9100 on the news before trading back to the $US 0.9080 level.
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