Stocks open higher on offshore gains

THE Australian share market opened slightly higher on the back of offshore gains.

THE Australian share market opened slightly higher on the back of offshore gains.

Investors appear optimistic that negative US economic data released yesterday could lead the US Federal Reserve to announce a fresh stimulus package in September.

At 1015 AEST, the benchmark S&P/ASX200 index was up 32.3 points, or 0.8 per cent, at 4328.8 points, while the broader All Ordinaries index had risen 31.4 points, or 0.7 per cent, to 4401.3 points.

On the ASX 24, the September share price index futures contract was 31 points higher at 4320, on volume of 10,615 contracts.

Patersons Securities associate director John Curtin said that post-reporting season, investors were relying on economic data from the northern hemisphere, particularly the US.

US stocks gained on Wednesday, boosted by better-than-expected manufacturing data manufacturing in the country's industrial heartland, while still ending the month of August with losses.

The Dow Jones Industrial Average gained 53.58 points (0.46 per cent) to close at 11,613.53.

The broader S&P 500 rose 5.97 points (0.49 per cent) to 1218.89, while the tech-heavy Nasdaq Composite edged up 3.35 points (0.13 per cent) to close at 2579.46.

Markets got a lift when the Institute of Supply Management-Chicago reported that its purchasing managers' index came in at 56.5 in August, above analysts' forecasts.

Any number greater than 50 indicates expansion.

"In a weird way, some of the bad or more disappointing economic news in the US is being seen positively because it's seen in light of the start of QE3 (quantitative easing three) which is what's keeping the gold price fairly high as well," he said.

Mr Curtin expects quiet day of trading, with long-term value buyers dominating the market.

"The money that really moves the market is waiting for more clarity on what the Fed does before we see a big move one way or the other in our market."

In local trade today, the major banks opened higher, with ANZ gaining four cents to $20.33 and Commonwealth Bank up 21 cents at $48.43. National Australia Bank rose 13 cents to $23.85 and Westpac was 13 cents higher at $20.73.

Among the miners, BHP Billiton was 21 cents higher at $39.95.

Fellow miner Rio Tinto was up 84 cents at $73.36 after it appointed former BHP Billiton chief financial officer Chris Lynch to its board as a non-executive director.

The best-performing stock at 1025 AEST was Caltex Australia, up 3.5 per cent, or 38 cents, to $11.20, according to IRESS data.

The spot price of gold in Sydney was $US1,824.40 per fine ounce, down $8.65 from Wednesday's local close at $US1833.05.

National turnover at 1016 AEST was 298.46 million shares changing hands for $512.86 million, with 425 stocks higher, 180 lower and 243 steady.