S&P/ASX 200 (ASX:XJO) closed up 0.2% at 5890 points as healthcare stocks rallied.
There weren’t any substantial moves in afternoon trading with the telecommunications and financial sectors providing most of the support.
The one index that did experience an afternoon rally was the S&P/ASX 200 Health Care index (ASX:XHJ).
The index was hovering in the vicinity of 24,500 points in mid-morning trading, but by the close it had put on circa 125 points to finish at 24,834 points.
Healthscope and Estia led the way with gains of circa 1.6%.
Earnings the key driver as reporting season unfolds
Looking across the S&P/ASX 20 (ASX:XTL), the big moves came from companies that delivered good earnings news.
They finished up 3.3% and 2.4% respectively, but for National Australia Bank shareholders the closing price of $28.90 is little respite following a sell down from $34.00 since May last year.
The company trades on a demanding forward price-earnings multiple of 34 relative to fiscal 2018 forecasts.
This usually means there is little scope for underperformance, so management will have to go close to meeting the consensus interim net profit forecast of $151 million.
S&P/ASX 200 pushes into positive territory at midday
S&P/ASX 200 (ASX:XJO) recovered all of the lost ground from the opening bell sell-off to move into positive territory by midday as it hit a high of 5,880 points.
This represented a slight increase on the previous day’s close of 5,876 points, but was more in keeping with the positive start implied by the SPI futures as US markets closed.
After the banks placed a substantial drag on the index yesterday, the S&P/ASX 200 Financials (ASX:XFJ) was one of the best performers, gaining 0.6%.
AMP and NAB drive financial sector higher
However, National Australia Bank Ltd (ASX:NAB) was the only bank to make any solid gains as it rallied 2.6% on the back of a positive first-quarter trading update.
This was a substantial increase on the previous corresponding period when it recorded an underlying net profit of $486 million.
AMP’s earnings result appeared to benefit fellow insurer, Steadfast Group (ASX:SDF), as it rallied 2.7%.
Interest in media and telecommunications
Their share prices were up 1.3% and 1% respectively.
Seven West Media (ASX:SWM) was the biggest ASX 200 gainer in morning trading as it surged 4.5%.
However, it was bouncing off a 12 month low of $0.50.
By 1 PM, the SPI futures was back in the black, pointing to a 13 point gain in the ASX 200.
Market lacking direction
S&P/ASX 200 (ASX:XJO) fell circa 40 points to 5,838 points within the first 10 minutes of trading.
Then there has been a slight recovery, but the market appears to be lacking direction, down 11 points at 11:30 AM (AEST)
Futures are pointing to a decline of 7 points.
The financials sector was the only one in the black, but was only up slightly.
As indicated yesterday, several large companies were reporting today, and this was expected to have an impact.
Investors responded negatively to AGL Energy’s (ASX:AGL) result with its shares coming off 2%.
Property developer, Mirvac Group (ASX:MGR) delivered a solid result and announced a buyback resulting in its shares rallying 1%
S&P/ASX 200 (ASX:XJO) is expected to open stronger despite overnight volatility in the Dow Jones industrial Average (INDEXDJX:DJI) index.
After opening slightly below the previous day’s close of 24,912 points, the Dow was up 380 points at one stage, hitting a high of 25,293 points.
Investors appeared to become nervous midway through trading before a slight bounce in the afternoon.
A last hour sell-off
However, all those gains were raised in the last hour of trading as the index slumped to 24,893 points, a decline of circa 0.1%.
This took the wind out of the SPI Futures with it now pointing to a gain of 22 points.
Looking at company specific moves, financials and specialist retailers were generally out of favour.
However, Walmart Inc was one of the best performers, gaining 2%.
Boeing Co notched up a gain of 2.1%.
The Nasdaq Composite (INDEXNASDAQ:IXIC) only briefly moved into positive territory and finished the day down nearly 1%.
European markets bounce strongly
European markets ignored the fairly measured response by Asia-Pacific markets following the rebound in the Dow to notch up some big gains prior to the US opening.
FTSE 100 (INDEXFTSE:UKX) rallied nearly 2% to close at 7279 points, seemingly assisted by economic data indicating that house prices had fallen in January on a month on month basis.
Shares in utility group, Severn Trent, finished up 3% after announcing a reduction in financing costs.
Germany welcomes political stability
The DAX PERFORMANCE-INDEX (INDEXDB:DAX) finished up 1.6%, closing at 12,590 points.
There were some strong performances from blue chips, but there was also support on the political front.
German Chancellor Angela Merkel struck a deal with the Social Democrats with the parties agreeing on the distribution of ministries.
On the equities front, there were strong gains from Adidas AG (+5.3%) and Deutsche Boerse AG (+4.1%).
Commodities plunge as US dollar strengthens
There were substantial falls in base metals with copper and zinc the hardest hit.
Copper plunged from US$3.22 per pound to US$3.12 per pound, a decline of circa 3%.
Zinc also fell 3% from US$1.61 per pound to US$1.56 per pound.
Nickel closed below the psychological US$6.00 per pound mark, retracing to January levels.
Iron ore rallies
Iron ore was one of the few bright spots, rallying 1.7% to finish at US$77.20 per tonne.
Gold was disappointing, falling nearly 1% to US$1317 per ounce as its safe haven appeal dissipated.
The oil price started to fall sharply as soon as US markets opened, plunging from circa US$63.80 per barrel to a mid-afternoon low of the US$61.25 per barrel.
While it found support towards the finish, it closed below the US$62.00 per barrel mark.