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Aussie market climbs on Obama plan

The Australian share market opened higher despite a weak lead from Wall Street, after US President Barack Obama delivered a $US447 billion ($A423.

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06 billion) plan to Congress to stimulate the American economy and jobs growth.

At 1017 AEST the benchmark S&P/ASX200 index was up 19.5 points, or 0.47 per cent, at 4,207.5 points, while the broader All Ordinaries index rose 17.9 points, or 0.42 per cent, to 4,287.7 points.

On the ASX 24, the September share price index futures contract was 17 points higher at 4,204 points on volume of 10,666 contracts.

US stocks slid on Thursday ahead of President Obama’s speech.

After snapping a three-session slide on Wednesday with a triple-digit gain, the Dow Jones Industrial Average on Thursday tumbled 119.05 points, or 1.04 per cent, to finish at 11,295.81.

The broader S&P 500 fell 12.72 points (1.06 per cent) to 1,185.90, while the tech-heavy Nasdaq Composite slid 19.80 points (0.78 per cent) to 2,529.14.

Wilson HTM head of wealth management, Andrew Coppin, said investors had watched President Obama’s speech closely, but were still wary of whether the highly anticipated plan would pass Congress, particularly as US futures had fallen after the speech.

“Obviously, everyone’s just been watching Obama’s speech to look for signs to the extent that (Mr) Obama has given an overview of how the US economy could get back on track to Congress. Now,

that’s put us (in) a bit better stead given the (share price index) was down a bit earlier,” he said.

“Counterbalancing that, there are still significant issues about European debt. We’ve got a G7 (Group of Seven nations) conference in France today and tomorrow. So, people will be looking to see what response comes out of Europe. But the initial reaction to Obama’s speech looks fairly muted at this point in time.”

Mr Coppin said he did not expect strong intra-day moves given the ongoing uncertainty about the Eurozone debt crisis, ahead of G7 meetings over the weekend.

He said trading volumes were likely to be light on Friday, with major fund managers avoiding a few extra days of risk as investors digested news from Europe and the US.

In early trade, local investors supported the enery sector, which was up 1.63 per cent, led by Origin Energy, the strongest performer in the top 20. Its shares rose 33 cents or 2.5 per cent to $13.59.

Gold stocks were also firmer, with Australia’s biggest gold miner Newcrest Mining gaining 51 cents to $40.06.

The spot price of gold in Sydney was $US1,860.39 per fine ounce, up $US14.99 from Thursday’s local close at $US1,845.40.