(RTTNews.com) - The Australian stock market opened higher on Wednesday, reflecting gains in mining and oil stocks, following the positive cues from Wall Street and the surge in crude oil prices.
However, the market has pared initial gains and is now modestly higher, with investors cautious ahead of the U.S. Federal Reserve's monetary policy decision later in the day.
In late-morning trades, the S&P/ASX 200 Index is adding 1.50 points or 0.03 percent to 5,937.90, after rising to a high of 5,963.00 earlier. The broader All Ordinaries Index is up 1.70 points or 0.03 percent to 6,042.50.
The major miners are higher despite another fall in the price of iron ore overnight. BHP Billiton is advancing more than 1 percent, Rio Tinto is adding almost 1 percent and Fortescue Metals is up 0.4 percent.
Rio Tinto has agreed to sell two Queensland coal projects to Glencore plc for $1.7 billion. The company also said there is a separate process underway to sell its remaining Australian coal assets.
Oil stocks are also advancing after crude oil prices gained more than 2 percent. Santos is higher by more than 1 percent, Woodside Petroleum is rising almost 1 percent and Oil Search is adding 0.4 percent.
The big four banks - ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank - are higher in a range of 0.3 percent to 0.9 percent.
Meanwhile, gold miners are mixed after gold prices declined overnight. Evolution Mining is advancing almost 1 percent, while Newcrest Mining is down 0.4 percent.
Myer Holdings reported a net loss for the first half on impairments and lower sales, and also suspended its interim dividend. However, the embattled department store chain's shares are rising more than 2 percent.
Nufarm reported a decline in profit for the first half of the year despite higher revenues and said it remains confident of earnings growth in the full year. The agricultural chemical supplier's shares are gaining almost 5 percent.
Shares of Crown Resorts are losing more than 1 percent after news that billionaire James Packer has resigned as director of the casinos operator as he is suffering from "mental health issues".
On the economic front, Australia will see February numbers for skilled vacancies and for the Westpac leading economic index today.
In the currency market, the Australian dollar is lower against the U.S. dollar on Wednesday ahead of the U.S. Federal Reserve's interest rate decision later today. The local unit was quoted at US$0.7689, down from US$0.7706 on Tuesday.
On Wall Street, stocks closed higher on Tuesday despite another rough session for Facebook, amid expectations the Federal Reserve and new Chair Jerome Powell will soothe investor concerns that interest rates will rise too fast.
The Dow added 116.36 points or 0.47 percent to 24,727.27, while the Nasdaq gained 20.06 points or 0.27 percent to 7,364.30 and the S&P was up 4.02 points or 0.15 percent to 2,7167.94.
The European markets fluctuated between small gains and losses throughout Tuesday's session, but ended the day slightly higher. The DAX of Germany climbed 0.74 percent, the CAC 40 of France rose 0.57 percent and the FTSE 100 of the U.K. gained 0.26 percent.
Crude oil futures rose sharply Tuesday as tensions between Iran and Saudi Arabia threatened supplies from the region. May WTI crude, the new front-month contract, settled at $63.54 a barrel on the New York Mercantile Exchange, up $1.41 or 2.3 percent.
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