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Aust shares in recovery as bloodbath ends

Melissa Jenkins
AAP
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Australian shares have opened sharply higher, a day after $66 billion was wiped off the market.

Australian shares have opened sharply higher, a day after $66 billion was wiped off the market.

Australian shares have clawed back about $17 billion as Asian markets recover from the impact of a three-day meltdown on Wall Street.

The benchmark S&P/ASX200 index gained 0.75 per cent to 5,876.8 points, regaining some of the ground lost from its 4.7 per cent drop over Monday and Tuesday that wiped $99 billion from the market's value.

Major Asian markets were mixed, with Japan's Nikkei up 0.3 per cent and Hong Kong's Hang Seng index slightly negative in late trade.

The relative calm follows a volatile session on Wall Street that ended with the Dow Jones Industrial Average rising by 2.3 per cent in Tuesday trading.

Ahead of US trading resuming, Dow Jones futures were 0.5 per cent weaker as the Australian market closed, suggesting US stocks are likely to fall when trade opens for the Wednesday session.

Independent market strategist Evan Lucas said growth-exposed sectors of the Australian market such as materials and energy stocks, performed well because global growth still looked robust and commodities prices remained strong.

"The volatility over the last few days is down to risk pricing in the US and unfortunately we got caught up in it," he said.

On the ASX, Rio Tinto gained 3.8 per cent to $78.31 before releasing its full-year results after the close of trade to show a 90 per cent improvement in net profit to $US8.76 billion ($A12.26 billion), courtesy of stronger commodity prices.

BHP Billiton climbed 1.8 per cent to $29.86 and Fortescue Metals lifted two per cent to $5.04.

Woodside Petroleum added 1.8 per cent to $32.60, Santos advanced 1.6 per cent to $5.03 and Oil Search added 1.9 per cent to $7.56.

Commonwealth Bank dipped 0.8 per cent to $76.79 after posting a two per cent fall in half-year profit to $4.7 billion, as it set aside $575 million for potential penalties and costs in its Federal Court battle with AUSTRAC and other regulatory issues including the upcoming royal commission.

The other big banks also lost ground, with Westpac down 0.1 per cent, National Australia Bank down 0.3 per cent and ANZ 0.4 per cent weaker.

Mr Lucas said investors would now be looking to the company reporting season, which was expected to deliver positive news.

"We are in line for some pretty good numbers, particularly from energy players (and) material players, which have had a very good 2017 calendar year with things like underlying commodity prices or energy prices moving in the right direction," he said.

"What I would put as a caveat to that is if they deliver in line or slightly weaker than expected numbers, they will be punished."

Shares in construction giant CIMIC jumped 3.5 per cent to $46.46 after it raised its dividend on the back of annual profit growth of 21 per cent, while carsales.com dropped 1.7 per cent to $14.12 as its 27 per cent lift in half year profit met expectations.

The Australian dollar made up some of the ground it lost against the US dollar in the last few sessions, trading at 78.77 US cents at 1700 AEDT, from 78.57 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 ended the session up 43.5 points, or 0.75 per cent, at 5,876.8 points.

* The broader All Ordinaries index was up 51.3 points, or 0.87 per cent, at 5,981.5 points.

* The SPI200 futures contract was up 26 points, or 0.45 per cent, at 5,790 points.

* National turnover was 4.3 billion shares worth $8.3 billion.

CURRENCY SNAPSHOT AT 1700 AEDT:

One Australian dollar buys:

* 78.77 US cents, from 78.57 US cents on Tuesday

* 85.99 Japanese yen, from 85.55 yen

* 63.59 euro cents, from 63.49 euro cents

* 56.41 British pence, from 56.25 pence

* 107.73 NZ cents, from 107.65 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEDT was $US1,329.61 per fine ounce, from $US1,343.40 per fine ounce on Tuesday.

BOND SNAPSHOT AT 1630 AEDT:

* CGS 4.50 per cent April 2020, 1.9796pct, from 2.0113pct on Tuesday

* CGS 4.75pct April 2027, 2.7952pct, from 2.7763pct

Sydney Futures Exchange prices:

* March 2018 10-year bond futures contract at 97.16 (implying a yield of 2.84pct), from 97.18 (implying a yield of 2.82pct) on Tuesday

* March 2018 3-year bond futures contract at 97.85 (2.15pct), from 97.84 (2.16pct).

(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)