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Australian shares higher on Wall St gains

 

Australian shares have opened higher following a surging US market on the back of a rise in oil prices and as investors bet on a strong US corporate earnings season.

The benchmark S&P/ASX200 index was up 0.1 per cent at 6,074 points, after the first half hour of trade on Friday, with energy and mining stocks leading the gains.

In the US, the S&P energy sector closed up two per cent as Brent crude went above $US70 ($A98) a barrel for the first time since December 2014.

The Dow Jones Industrial Average closed 0.81 per cent higher at 25,574.73, while the S&P 500 gained 0.70 per cent, and the Nasdaq Composite added 0.81 per cent.

Charles Schwab market analyst Ben Le Brun said the positive sentiment on Wall Street appears to have put concerns about the bond markets to one side, following a report on Thursday that China could be set to stop or slow its US Treasuries purchases.

"It is all about Wall Street at the moment and those positive moves we have seen almost on a nightly basis," Mr Le Brun said.

"The US is certainly now focusing on the anticipation of a strong earnings period and that has seen us come out of the gates in an optimistic mood."

Locally, energy and mining stocks followed Wall Street's gains after the rise in oil prices on the back of further signs of tightening supply in the United States and expectations that OPEC's output cuts would underpin the market.

Woodside Petroleum was up one per cent to $34.55 and Oil Search gained 0.6 per cent to $7.90, while mining giants BHP Billiton, Rio Tinto and Fortescue Metals were trading between 1.1 per cent and two per cent higher.

But Incitec Pivot fell 3.9 per cent to $3.71 after warning its full-year profits over the next four years will take an $81 million hit from the end of a contract to supply explosives products and services to Gina Rinehart's Roy Hill Iron Ore mine.

The big four banks were mixed in early trading, with ANZ and Commonwealth Bank and Westpac all weaker, while National Australia Bank rose 0.1 per cent to $29.55.

Meanwhile, the Australian dollar is marching toward 79 US cents, extending the gains it made following Thursday's better-than-expected retail trade figures for November.

The local currency was trading at 78.89 US cents at 1030 AEDT on Friday, from 78.74 on Thursday.

ON THE ASX AT 1030 AEDT:

* The benchmark S&P/ASX200 was up 6.4 points, or 0.1 per cent, at 6,074 points

* The broader All Ordinaries index was up five points, or 0.1 per cent, at 6,181.2 points

* The SPI200 futures contract was up 11 points, or 0.2 per cent, at 6,024 points

* National turnover was 698.3 million securities traded worth $551.8 million