Australian Market Significantly Higher

The Australian stock market is significantly higher on Tuesday, extending the gains in the previous session, with the benchmark S&P/ASX 200 just below the 7,300 level, following the broadly positive cues from Wall Street overnight, on higher crude oil prices and as traders picked stocks at a bargain after the recent virus-induced sell-off.

Traders also digested reports that the new coronavirus variant would be milder than initially dreaded, but spreads rapidly.

However, there are concerns over the rising Covid-19 cases in Sydney and other cities, with New South Wales reporting 260 new cases on Monday, of which 31 are of the new Omicron variant. Victoria also reported 1,185 new cases and seven deaths, with no Omicron cases.

The benchmark S&P/ASX 200 Index is gaining 45.40 points or 0.63 percent to 7,290.50, after touching a high of 7,312.20 earlier. The broader All Ordinaries Index is up 51.60 points or 0.69 percent to 7,580.60. Australian stocks closed marginally higher on Monday.

Among the major miners, Mineral Resources is flat, BHP Group is edging down 0.3 percent, OZ Minerals is edging down 0.5 percent, Rio Tinto is edging down 0.4 percent and Fortescue Metals is losing 1.5 percent.

Oil stocks are higher. Woodside Petroleum and Santos are edging up 0.5 percent each, while Oil Search is gaining 1.5 percent, Beach energy is advancing 2.5 percent and Origin Energy is adding more than 1 percent.

Among the big four banks, National Australia Bank is edging up 0.5 percent, ANZ Banking is advancing more than 1 percent and Westpac is up almost 1 percent. Commonwealth Bank is flat.

Among tech stocks, Appen is gaining more than 3 percent, Zip is advancing 5.5 percent and WiseTech Global is edging up 0.5 percent, while Afterpay and Xero are adding more than 1 percent each.

Gold miners are mostly higher. Resolute Mining and Newcrest Mining are edging up 0.5 percent each, while Northern Star Resources is edging up 0.3 percent, and Gold Road Resources is edging up 0.1 percent. Evolution Mining is edging down 0.3 percent.

Travel stocks are bouncing back, with Qantas gaining more than 4 percent, Flight Centre advancing more than 5 percent, and Corporate Travel Management surging more than 6 percent.

In economic news, house prices in Australia were up a seasonally adjusted 5.0 percent on quarter in the third quarter of 2021, the Australian Bureau of Statistics said on Tuesday – slowing from 6.7 percent in the previous three months. On a yearly basis, house prices jumped 21.7 percent, up from 16.8 percent in the second quarter. The total value of residential dwellings in Australia rose A$487.0 billion to A$9,259.2 billion this quarter, and the mean price of residential dwellings rose A$42,000 to A$863,700. The number of residential dwellings was 10.720 million.

The ABS also said total number of building permits issued in Australia was down a seasonally adjusted 12.9 percent on month in October, coming in at 15,911. That was in line with expectations following the 3.9 percent drop in September. Permits for private sector houses rose 4.3 percent on month to 10,799, while permits for private sector dwellings excluding houses plummeted 37.5 percent to 4,821. On a yearly basis, permits for private sector houses slipped 3.7 percent, permits for private sector dwellings excluding houses sank 16.5 percent and overall permits fell 8.1 percent.

Meanwhile, the Reserve Bank of Australia will wrap up its monetary policy meeting on Tuesday and then announce its decision on interest rates. The RBA is widely expected to keep its benchmark lending rate unchanged at 0.10 percent.

In the currency market, the Aussie dollar is trading at $0.705 on Tuesday.

On Wall Street, stocks showed a strong move to the upside during trading on Monday following the rollercoaster ride seen last week. The major averages all moved notably higher on the day, with the Dow posting a particularly strong gain.

The major averages pulled back off their best levels in late-day trading but remained firmly positive. The Dow surged 646.95 points or 1.9 percent to 35,227.03, the Nasdaq advanced 139.68 points or 0.9 percent to 15,225.15 and the S&P 500 jumped 53.24 points or 1.2 percent to 4,591.67.

The major European markets also showed strong moves to the upside on the day. While the German DAX Index jumped by 1.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both surged up by 1.5 percent.

Crude oil futures settled sharply higher Monday as Saudi Arabia’s Aramco hiked prices of crude exported to Asia and the U.S. and amid easing concerns about Omicron. West Texas Intermediate Crude oil futures for January surged $3.23 or 4.9 percent at $69.49 a barrel.

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