Australian shares opened higher on Friday, tracking a strong rebound on Wall Street as optimism builds around a potential Middle East peace agreement.
By 10:25 am AEST (12:25 am GMT) the ASX 200 index was trading 1.3% higher.
The rebound echoed higher close in the United States in the wake of President Donald Trump’s statement that “all parties” had approved a draft peace deal between the U.S. and Iran.
The three main U.S. indexes registered their biggest daily percentage gains since 8 April after Trump said he had cancelled planned strikes against Iran and that a peace deal could be signed as soon as this weekend to reopen the Strait of Hormuz.
The Dow Jones Industrial Average rose 1.9%, the S&P 500 added 1.8%, and the Nasdaq Composite beat them both with a 2.5% jump on Thursday (Friday AEST).
"Our technical indicators are looking relatively oversold here," Per Stirling Capital Management director Robert Phipps was quoted as saying in a Reuters story.
"Just as we had gone up too far, too fast, we came down too far, too fast."
The Australian market had edged lower on Thursday with the ASX 200 slipping 20.1 points, or 0.2%, to 8,633.2 points despite seven of the index's 11 sectors finishing higher.
Burrell Stockbroking wealth adviser Adam Dight said he had been recommending clients invest in sold-off property trusts and mining stocks leveraged to the copper and lithium price, like BHP and Rio Tinto.
“We’re saying ‘load up’,” he said.
In fixed interest markets, Australian Government bond yields rose, with two-year yields adding 0.02% to 4.517% and 10-year yields gaining 0.48% to 4.854 at the time of writing.
