Stocks flat at open after US oil cracks $US50 a barrel mark

The local bourse has tracked sideways in early trade, as traders take in oil’s overnight rally and look to US jobs data.

 

The Australian sharemarket is trading sideways in early deals, aided by strength in oil prices but weighed by a lack of interest in high-yield sectors as easy monetary policy appears likely to be gradually unwound.

At the 10.15am (AEDT) official market open, the benchmark S&P/ASX 200 index was steady at 5,483, while the broader All Ordinaries index edged down 2.3 points, or 0.04 per cent, to 5,562.5.

CMC Markets analyst Colin Cieszynski said charts suggested the local market was in a good position to push higher.

“Australia 200 is bumping up against 5,500 again climbing up off its 50-day average near 5,445 while rising RSI confirms upward momentum increasing,” he said.

“Next potential resistance near 5,565 then 5,600, with more support near 5,400.”

Commodities are in focus, as the US dollar wins plenty of support from the prospect of rising rates, with December firming as the meeting for the next hike given data continues to outstrip expectations.

“This is what has driven the $US63 decline in gold this week and pushed it through the key psychological 200-day moving average,” IG market analyst Angus Nicholson said.

“But there looks to be further downside to gold even if non-farm payrolls (due out overnight) only slightly misses expectations.”

In contrast, oil is shrugging off the impact of a rising US dollar as investors focus on improving supply and demand fundamentals.

US crude jumped 1.3 per cent overnight, moving back above the psychologically important $US50 a barrel mark.

“The OPEC deal and the fifth week of straight declines in the EIA crude oil inventories continue to buoy the oil market,” Mr Nicholson said.

“Fears about disruptions from Hurricane Matthew may also be providing some upside.”

In energy, Santos inched up 0.1 per cent to $4.01, Origin Energy added 0.4 per cent to $5.61, while Woodside lifted 0.5 per cent to $29.58.

In materials, BHP Billiton was steady $23.12, Rio Tinto slid 0.6 per cent to $51.88 and Fortescue advanced 0.5 per cent to $4.955.

The big four banks saw mixed results, with NAB and ANZ broadly flat, while CBA and Westpac tacked on 0.2 per cent.

Among other blue chips, Telstra gave back 0.4 per cent to $5.04 in a sign of fading interest in defensive, high-yield sectors, while Qantas weakened 0.3 per cent to $3.15 on rising oil prices.

Elsewhere, Estia Health skidded 4 per cent as investors continued to punish a profit outlook downgrade, while Karoon Gas is in a trading halt pending an announcement in relation to negotiations involving two Brazilian oilfields.

Meanwhile, the Australian dollar steadied around US75.8c after weakening below US76c overnight.