The local share market has bounced back from Tuesday’s sharp losses this morning after Wall Street showed resiliency overnight following the Bank of Japan’s surprise move on bond yields.
At noon AEDT on Wednesday, the benchmark S&P/ASX200 index was up 112.6 points, or 1.6 per cent, to 7136.9, after losing 109.6 points on Tuesday.
The broader All Ordinaries was up 114.7 points, or 1.59 per cent, to 7315.6.
While global bond yields jumped after Japan’s dovish central bank eased its attempt to keep its yields at near zero, the S&P500 closed 0.1 per cent higher after a five-day selloff.
CMC Markets Auckland-based analyst Tina Teng wrote in a note that the resiliency showed that equities may have been oversold.
“The price action could suggest that the US stocks could be still on track for a Christmas Rally,” she said.
“But risks remain as the BOJ-induced selloff in the global bonds may continue to send jitters to risk assets.”
For Wednesday morning, at least, things were solidly in the green on the ASX, with every sector higher.
Utilities were the biggest winner, climbing 6.2 per cent to $7.52 as Origin Energy confirmed that Brookfield Asset Management was on track to finish due diligence on its $9-per-share takeover offer in mid-January, and had not identified any material adverse matters to date.
The heavyweight mining sector was up 2.3 per cent, with BHP climbing 2.2 per cent, Rio Tinto up 2.1 per cent and Fortescue Metals adding 2.8 per cent.
Goldminers were up strongly as the yellow metal surged to $US1,818 an ounce, close to a six-month high, as the US dollar weakened on the Bank of Japan move.
Newcrest had gained 6.2 per cent, Northern Star had added 3.8 per cent and Evolution gained 7.0 per cent to $3.04, its best level since June.
The big banks were all up, with ANZ adding 1.2 per cent, Westpac climbing 1.0 per cent, NAB up by 0.6 per cent and CBA gaining 0.2 per cent.
MoneyMe had surged 25.5 per cent to 29.5c after the personal lender restructured its debt covenant agreements with its lender, Pacific Equity Partners.
TPG Telecom had dropped 2.3 per cent to a two-month low of $4.66 after the Australian Competition and Consumer Commission rejected its proposed network sharing agreement with Telstra, a decision both TPG and Telstra said they would appeal. Telstra was flat at $4.04.
The Australian dollar meanwhile had recovered slightly against the greenback. It was buying 66.84 US cents, from 66.55 US cents at Tuesday’s ASX close.