Local shares are poised to extend their rally as global investors poured into equities in Europe and on Wall Street on the US Fed's "patience" on rates and optimism on the US economy.
What you need2know:
• SPI futures up 62pts at 5225
• AUD at 81.55 US cents
• In late trade, S&P 500 +1.6%, Dow +1.7%, Nasdaq +1.8%
• In Europe, Euro Stoxx 50 +3.3%, FTSE +2%, CAC +3.4%, DAX +2.8%
• Spot gold up $US6.08 or 0.5% to $US1195.79 an ounce
• Brent oil down $US1.61 or 2.6% to $US59.57 per barrel
What's on today
Bank of Japan policy meeting ends, UK budget data, Ukraine rating update from S&P.
Stocks to watch
Leighton Holdings achieved a "fair price" on the partial sale of its services business to a US private equity giant this week, and will use the $700 million in proceeds to shore itself up against possible impairments, Deutsche Bank has said.
Software developer WiseTech Global is seeking to raise up to $50 million in pre-IPO funding, as it delays its sharemarket debut until at least the fourth quarter of 2015, according to the Australian Financial Review's Street Talk column.
Morgan Stanley has upgraded Qantas to "overweight" and has a $2.90 price target. "In the last six months Qantas has shown capacity discipline, a yield recovery, a weakened competitor, cost-out, and fuel upside – all of which we failed to fully appreciate."
Credit Suisse has an "underperform" rating on Santos and a $7.45 target price. "Last week Santos announced it plans to cut $700m of capex in 2015. Whilst pruning may have been prudent, it still appears to us the cut was more a reaction to the hybrid failing than the oil price falling. We assume a $500m cut, finding the rest hard to be confident on."
Currencies
Wall Street primary dealers, on average, expect the first rate hike to come in June 2015, according to a Reuters poll. "Even doves need to tighten at some point when the numbers start looking good," said James Liu, global market strategist at JPMorgan Funds in Chicago.
Pressure on Russia's rouble remained as President Vladimir Putin tried to cool worries of a financial crisis taking hold. In his end-of-year news conference, Putin sought to calm worries that the near-45 per cent plunge in the rouble since June has left Russia on the brink of a full-blown crisis. The rouble was roughly 1.5 per cent weaker on the day.
The European Central Bank said it would start publishing accounts of its monetary policy meetings next year, starting with the meeting on January 22, a move that will raise the ECB's transparency but still leave it behind other big central banks.
Commodities
After a short-covering rally, oil reversed direction and resumed its slide. Traders braced for more selling in a market that had already lost nearly 50 per cent of its value since June. "We're continuing to search for a bottom and might even see another significant drop before the year-end," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
The rate to ship the steel-making commodity on a Capesize vessel to Qingdao, China from Tubarao, Brazil slid 4.9 per cent to $US11.86 a ton on Thursday, the lowest since January 8, 2009, data from the Baltic Exchange in London show.
BP faces a first and heavy loss from its stake in Russia's Rosneft due to plummeting oil prices and a crumbling rouble, potentially forcing it to write down the value of its once-prized asset. BP's fourth-quarter earnings could fall by more than two thirds from the previous quarter to 5 cents per share as Rosneft will weigh on its profits with a loss of up to $US750 million, according to several forecasts
United States
US stocks climbed more than 1 per cent in early afternoon trade, extending a rally from the previous session as tech shares gained with upbeat results from Oracle.
The technology sector, up 2.2 per cent, helped fuel the advance, buoyed by a gain of over 8 per cent in Oracle, a day after its quarterly results topped Wall Street expectations. Shares of Apple climbed 1.9 per cent.
The Conference Board said on Thursday its Leading Economic Index rose 0.6 per cent last month after a downwardly revised 0.6 per cent increase in October. Economists polled by Reuters had expected the index to advance 0.5 per cent.
Europe
European shares surged with a rise in Greek equities after the leader of the country's main opposition party said he was committed to keeping Greece in the euro should his leftist party take power next year.
The leader of Greece's radical leftist party Syriza, Alexis Tsipras, told Reuters he wanted a negotiated debt relief solution with the European Union and to keep the country in the euro currency bloc.
Nokia Networks and Alcatel-Lucent have revived talks on a possible merger, Germany's Manager Magazin reported, citing company sources. The two companies could agree to merge or strike up a close cooperation. Shares in Alcatel rose 8.7 per cent; Nokia was up 3.4 per cent.
What happened yesterday
The local sharemarket rose strongly on Thursday, with the S&P/ASX 200 rising 0.95pc, on the back of an overnight surge in US stocks, withstanding an afternoon fade-out that erased some of the day's gains.
