Australian shares were higher at noon, extending gains from the morning as institutional traders took advantage of a brief reprieve from last week’s market volatility.
But the market could decline even further in forthcoming months as the US and European debt crisis continues to plague investor sentiment.
At 1200 AEST, the benchmark S&P/ASX200 index was up 80.6 points, or 1.9 per cent, at 4,253.2, while the broader All Ordinaries index was up 81.3 points, or 1.92 per cent, at 4,319.2.
On the ASX 24, the September share price index futures contract was up 87 points at 4,226, with 24,935 contracts traded.
Wealth Within analyst Janine Cox said the gains were the result of institutional and speculative trade following a week of panic in markets.
“The institutionals trade with algorithms, so they’ll have a lot of computer algorithms sitting there waiting to pick up the stock when they hit a certain price. A lot of that can cause a rebound, plus you get a lot of short selling because of the spring back into the market,” she said.
Ms Cox said the market was likely to be steady for the rest of the day, but was still highly reactive and risked even greater declines in the coming months.
“This will be the speculators trying to bottom pit and there’s a real danger in doing that, because to me it doesn’t look like the decline is completely over,” she said.
In local trade, miners continued to rise, with BHP Billiton shares up $1.46, or 3.8 per cent, at $36.97, and Rio Tinto up $2.26, or 3.2 per cent, at $73.78.
The banks were mixed, with National Australia Bank 47 cents higher at $23.43, Westpac up 33 cents at $20.80, and ANZ gaining 51 cents to $20.43.
Commonwealth Bank lost $1.49, or 3.1 per cent, to $47.07 after going ex-dividend.
Making news, shares in Australia’s biggest construction company, Leighton Holdings, jumped $1.35 or 6.8 per cent to $21.20 after forecasting a return to profit of $600 million to $650 million in fiscal 2012.
Earlier on Monday, the company reported a full year loss of $408.8 million for the 12 months to June 30, down from $612.00 million profit the previous year.
Ansell shares gained 61 cents or 4.6 per cent to $13.75 after it announced a 2.7 per cent rise in full year profit to $122.7 million for the 12 months to June 30 and forecast that earnings per share would rise as much as 12 per cent this financial year.
At noon, the price of gold in Sydney was $US1,744.6 per fine ounce, down $US10.60 from Friday’s local close at $US1,755.20.
Gold miner Newcrest Mining was down 81 cents at $39.92 after announcing it had increased its full year profit by 63 per cent as the company reaped the benefits of its acquisition and integration of Lihir Gold.
Preliminary national turnover at 1202 AEST was 823 million shares worth $2.2 billion, with 686 stocks up, 219 down and 266 steady.
