The stock market had a surprisingly positive session yesterday as potential buyers appeared to get nervous about being left on the sideline. Early indications are that the market will continue in this vein today, creating the possibility that the ASX 200 index will test recent highs at 5611 at some stage this week.
The spot iron ore price continues to inch higher defying consensus predictions. This is likely to support demand for the major iron ore miners today. However the key to the index today is likely to be whether yesterday’s support for the big 4 banks and Telstra continues.
Qantas’ result reflects the benefit of solid demand, contained fuel costs and an end to the profit destroying “capacity wars”. However, the stock has enjoyed solid gains leading into this result which, at the headline level, is a little soft on consensus expectations.