Australian shares opened higher after strong overseas leads and hopes that the Reserve Bank of Australia will deliver an interest rate cut.
At 8.19am, the benchmark S&P/ASX200 index was up 16.8 points, or 0.38 per cent, at 4405.4 points, while the broader All Ordinaries index had gained 16.3 points, or 0.37 per cent, to 4424.6 points.On the ASX 24, the December share price index futures contract was 15 points up at 4409 points, with 7702 contracts traded.
RBS Morgans private client adviser Bill Bishop said the Australian market had followed strong overseas leads, especially from Europe.European stocks and the euro rallied on Monday as traders tracked Spanish debt strains and the revival of a merger bid by commodities sector giants Xstrata and Glencore.
“It was a nice run for the Europeans after the Spanish banks passed the stress tests,” he said.
US stocks posted a solid jump, propelled by an unexpected positive reading on manufacturing sector activity in September.
The Dow Jones Industrial Average gained 77.98 points, or 0.58 per cent, to 13,515.11.
“The overall market has risen across the board,” Mr Bishop said.
There was also optimism in the market that the RBA would cut the cash rate when it held its October board meeting today, he said.
As well as its monthly board meeting, the RBA will also release its index of commodity prices for September.The mining giants and major banks all opened higher.
BHP Billiton was up 29 cents to $33.41 and Rio Tinto added 39.5 cents to $53.75.
ANZ was seven cents higher at $24.86, National Australia Bank was up 11 cents to $25.65, Westpac added nine cents to $25.03 and Commonwealth Bank rose five cents to $55.90.
Qantas shares were up 2.75 cents, or 2.3 per cent, at $1.2175, after announcing it had sold its 50 per cent stake in road freight operator StarTrack to Australia Post, and taken full ownership of air freight business Australian air Express.
Shortly after the market opened, the High Court ruled Qantas must pay $34 million in GST it had collected from passengers who booked tickets but didn’t take their flights.National local turnover was 272.2 million securities worth $317 million, with 368 stocks up, 200 down and 243 unchanged.