Aust shares power ahead as mood brightens

The Australian sharemarket has opened strongly, extending yesterday's rally on more buoyant investor sentiment following a positive session on Wall Street overnight.

In early trade, the benchmark S&P/ASX200 index was 56.7 points higher, or 1.3 per cent, at 4552.4, hitting its highest level since August 10. The broader All Ordinaries index rose 56.0 points, or 1.2 per cent, to 4582.8.

IG Markets research analyst Ben Potter said stronger than expected manufacturing data in the US and China had allayed concerns about a double dip recession around the world.

Manufacturing activity in the US expanded in August for the 13th straight month, lifting hopes that economic growth won't stall, data showed overnight.

The Institute for Supply Management said its manufacturing index rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth.

Also on Wednesday, the HSBC China Manufacturing purchasing managers index showed a rise to a three-month high of 51.9 last month from 49.4 in July.

"Obviously, (it was) a very good session in the US, with a bit more volume, all on the back of the better than expected Chinese manufacturing but also the sharper than expected US manufacturing data," Mr Potter said from Melbourne.

"It has boosted people's confidence that the US economy is not going to drift into a double dip recession.

"Basically, (the market) has surged across the board."

Mr Potter said the local market would take its direction on Thursday from Asia.

"(Direction will come from) what happens in Asian trade throughout the session."

The energy sector was mixed in early trade on Thursday. Santos was seven cents lower at A$14.22, Woodside Petroleum was up 40 cents, or 0.93 per cent higher, at A$43.30, and Oil Search was up four cents at A$5.98.

Retailers were firmer. Woolworths was 16 cents higher at A$28.39, while Coles owner, Wesfarmers, was up 35 cents at A$33.07.

In news on Thursday, Foster's Group Ltd chief financial officer (CFO) Angus McKay has resigned from the drinks company to join ports and rail operator Asciano Group in a similar role.

Shares in Asciano were up 1.5 cents at A$1.74, while Fosters were up one cent at A$6.12.

The spot price of gold in Sydney at 10.50am AEST (12.50pm NZT) was $US1,245.80 per fine ounce, down $3.58 on Wednesday's closing price of $US1,249.38.

Gold miner Newcrest Mining was down 19 cents at A$37.71.

The highest turnover stock by volume at 10.51am AEST was Cougar Energy, with 44.3 million shares changing hands at a total value of A$1.67 billion.

Shares in the coal gas developer were down 3.5 cents, or 46.67 per cent, at 4.0 cents, shortly after the coal seam gas developer resumed trading after a suspension since July.

Cougar warned in its annual results on Tuesday that it may not be able to continue as a going concern unless the Queensland government lifts an environmental order which has stopped work at its pilot plant near Kingaroy.

National turnover at 10.53am AEST was 626.1 million shares worth A$1.412 billion, with 577 stocks up, 210 down and 292 were unchanged.

- AAP