THE Australian share market has opened higher amid views that investors over-reacted to Europe's debt problems with heavy sell-offs on Monday.
Yesterday's falls in Australia were the heaviest of the year (above two per cent) but a relatively muted response in Europe to Cyprus' plans for a deposit tax suggested fears of that idea spreading to Italy and Spain were wrong.
IG Markets market strategist Evan Lucas said Australia and the Asian region had posted heavy falls yesterday in response to the Europe and US doing so on Friday. Now there appeared to be "contrarian buying" as investors deciding some good quality stocks looked too cheap.
"There was a quite a hard hit on Australian banks yesterday, Westpac was down 3.24 per cent despite having absolutely no peripheral exposure to the euro zone," he said. "The miners: BHP, Rio and FMG (Fortescue Metals Group) are off 10, 12 and 17 per cent respectively since February highs to levels where a lot of support comes in."
Among the big miners BHP Billiton was 86 cents 19 cents up to $34.88, Rio Tinto had gained 35.5 cents to $59.905 and Fortescue was 10 cents, or 2.6 per cent, better at $4.00 after being punished in recent weeks.
The banks were also higher, with National Australia Bank up 28 cents to $30.77, Westpac improving 22 cents to $30.19, Commonwealth adding 49 cents to $69.71 and ANZ 15 cents higher at at $28.33.
KEY FACTS
* At 10.40am AEDT today, the benchmark S&P/ASX200 index was 26.3 points, or 0.52 per cent, up at 5041.7.
* The broader All Ordinaries index was 25 points, or 0.5 per cent, stronger at 5052.4.
* The March share price index futures contract was 33 points better at 5039, with 57,774 contracts traded.
* National turnover was 510.05 million securities worth $604.87 million.
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