Up via the Stairs

After a nerve rattling drop in the elevator yesterday, the Australian share market is climbing the stairs of recovery today. A lift in consumer confidence and better than expected growth in Q2 house prices is also adding support. An overnight oil rally puts energy stocks at the top of the market, and industrial and consumer staples stocks are also sought, as every share market sector trades higher.

Better leads from overseas stocks and a lower Australian dollar are helping investors find firmer ground. Investors are taking comfort from the higher low point achieved by the index yesterday, and while nervousness remains the price action is indicating the worst of the selling may be over. Market confidence is fragile, as reflected by reduced volumes in both share and futures markets.

House prices rose 4.7% last quarter, accelerating from Q1’s 1.6% gains and well over the forecast lift of 2.3%. While this will no doubt spark the usual round of housing market “bubble” doomsayers, the wealth effect appears more important in trading today.

TPG’s reported 31% growth contributes to M&A inspired optimism in the Telco sector. However, in a classic “sell the fact” scenario, TPG shares are down 2%, having risen almost 25% in the lead up to today’s data release.