THE Australian share market rose strongly in early trade after Wall Street's sharp gains in a week of huge swings in global markets.
The benchmark S&P/ASX 200 index rose 1 per cent to 4183.7 in early tra
ding, although a steep fall in BlueScope Steel on asset write-downs contained the advance in the market overall.
The "risk-on" trade boosted the Australian dollar, which was trading at $US1.0322 at 10am AEST, up from $US1.0287 at the close of Sydney trading yesterday.
Asian stock markets also opened strongly, with Japan climbing 0.9 per cent and South Korea rising 1.5 per cent. Investors also took profits on haven assets, with spot gold falling 1 per cent to $US1749.50 in early Asian trade. On Wall Street, US stocks notched a massive advance, as investors seized on favourable corporate and economic reports to recover most of the ground they lost in the previous session. The blue-chip Dow Jones Industrial Average soared 423.37 points, or 3.95 per cent, to 11143.31, the second biggest point and percentage gain this year.
It was the fourth straight move of 400 points or greater, a first in the Dow's history. "It's great to have these up days, but I think that we are going to continue to be in a choppy period with these big swings," said Margaret Patel, senior portfolio manager at Wells Capital Management. "The reason we had our meltdown was really over in Europe. It made the markets look like one of the dark days in 2008, melting away with no rhyme or reason."
The strong gains in global equity markets came as regulators in Spain, Italy, Belgium and France said they would impose new bans on short selling from today in an effort to lower volatility in European stock markets.
"They have done so either to restrict the benefits that can be achieved from spreading false rumours or to achieve a regulatory level playing field, given the close inter-linkage between some EU markets," said ESMA, which co-ordinates securities rules in the EU, following a conference call with all 27 national regulators.
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