The local bourse opened higher after US stocks climbed overnight on a bounce in oil prices and a strong quarterly earnings report from Facebook.

But it has since slipped into the red despite strong gains among energy stocks.

A mix performance from the financial stocks and losses among health stocks and the supermarket giants are weighing on the market.

At noon (AEDT), Woodside Petroleum was up 82 cents to $27.19, Santos was up 10 cents to $3.04 and Oil Search was 19 cents higher at $6.29.

Three of the big banks were lower, with National Australia Bank the only gainer.

The health and consumer stables sector are also down with Ramsay Health shedding 45 cents to $60.45 and major retailer Woolworths down 1.31 per cent and rival Wesfarmers down 0.45 per cent.

Shares in Shine Corporate suffered a steep fall after the law firm slashed its full year earnings guidance by about 50 per cent.

Shine was down $1.405, or 70.25 per cent, to 59.5 cents.

Earlier today the benchmark index was up 0.3 per cent in early trade, helped by strong cues from Wall Street.

“There is still a lot of uncertainty, so we could be in for a volatile session. We could see a number of reversals during the day,” IG’s market analyst Angus Nicholson said.

Earlier, Wall Street climbed after a strong quarterly report from Facebook and a bounce in oil prices helped prop up the beleaguered energy sector.

The Dow Jones Industrial Average closed 0.8 per cent higher despite a disappointing policy update from the US central bank.

In the local market, energy and mining stocks remained the best performing.

A 6 per cent rise in oil prices pushed heavyweights Woodside Petroleum and BHP Billiton into positive territory, with both stocks up nearly 3 per cent.

Shares in Oil Search, Santos and Origin Energy were also up between 2 to 3 per cent.

Among resource stocks, Fortescue jumped nearly nine per cent to $1.66 after reporting lower debt and a faster than planned cut in production costs on Thursday. Rio Tinto shares were also trading 1 per cent higher.

“Whether the index pulls higher will really depend on the banks, which have been missing out over the past few days,” Nicholson said.

Shares of the big four banks were up between 0.2 to 1.0 per cent.

Among the major losers, law firm Shine Corporate slid nearly 70 per cent to 64 cents after slashing its full year earnings guidance by about 50 per cent, after deciding that some of the cases it has taken on will not succeed.

ANZ economists said global bond markets were pulled around overnight by headlines on oil supply.

Oil reached the highest level since January 6 after Russia suggested that OPEC kingpin Saudi Arabia had proposed global oil production cuts of up to 5 per cent.

If achieved, it would be the first universal deal in more than a decade to help clear a glut of crude and prop up sinking prices.

“We think the likelihood of an agreement between producers is extremely low,” ANZ economists said.

They said the Australian bond market was a slight underperformer overnight.

“We would expect the market to open stable, but with an eye on regional equities once again,” ANZ economists said.

At 8.30am (AEDT) on Friday, the March 2016 10-year bond futures contract was trading at 97.320 (implying a yield of 2.680 per cent), up from 97.310 (2.690 per cent) on Thursday.

The March 2016 three-year bond futures contract was at 98.090 (1.910 per cent), up from 98.080 (1.920 per cent).

The Australian dollar has gathered steam as commodities rebound and the greenback weakens.

At 7am (AEDT) on Friday, the local unit was trading at 70.78 US cents, up from 70.40 cents on Thursday.

Overnight, the Aussie hit a three-week high of 71.29 US cents.

OM Financial senior client adviser Stuart Ive said the currency’s three-day rally continues as commodity prices edge higher in a risk-on appetite in the market.

Oil prices have bounced off their recent 12-year lows, with crude surging three per cent overnight.

“Also last night, US durable goods came in significantly lower than expected, dropping 5.1 per cent in December,” Ive said.

“This raises fears about US growth ahead of their GDP (gross domestic product) data tonight.

The weak number dragged on the greenback, which allowed the Aussie to spike, Ive said.

But it has since pared back some of those gains.

There are no major domestic economic releases scheduled for Friday, but investors will be watching the Bank of Japan’s monetary policy decision.

“While people aren’t expecting the BoJ to change their monetary policy or their quantitative easing, there is always the chance,” Ive said.

“If they add more stimulus the Aussie will benefit from that, generally speaking it adds to risk-on (sentiment).”

Westpac strategist Imre Speizer expects the currency’s positive momentum to continue on Friday, targeting 71.30 US cents.

NEW YORK – Wall Street is higher after swinging between gains and losses as a fall in healthcare stocks capped gains in technology and energy shares.

The S&P health sector was the biggest loser, while the Nasdaq biotech index was on track for its biggest monthly fall in 16 years with a three per cent decline.

However, the energy sector was buoyed by the rise in crude oil, which gained as much as six per cent on speculation that Saudi Arabia and other OPEC countries would cut output to boost prices, before dropping away to be around the $US33 mark.

“Oil’s been firmly in control of the market,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

“I think what oil has become is a proxy for ‘are we going into a recession?’,” she said.

At 12:59 p.m. ET (1759 GMT), the Dow Jones industrial average was up 107.14 points, or 0.67 per cent, at 16,051.60, the S&P 500 was up 14.73 points, or 0.78 per cent, at 1,897.68 and the Nasdaq Composite index was up 35.56 points, or 0.80 per cent, at 4,503.73.

LONDON – Britain’s top stock index retreated after hitting a three-week high earlier in the session, weighed down by Ashtead and travel stocks hit by rising oil prices.

Equipment rentals company Ashtead was the top faller on the blue-chip FTSE 100 index on Thursday, down 7.8 per cent after US peer United Rentals reported an underwhelming set of fourth-quarter results.

“Even though Ashtead are listed over here, they are predominantly a US-exposed company,” Manoj Ladwa, head of trading at TJM Partners, said, adding that a slowdown in the US market wasn’t helping the stock.

The blue-chip FTSE 100 index was down one per cent at 5,931.78 points at its close after earlier rising over the 6,000.00 level, its highest since early January.

The benchmark index is still down around five per cent following a commodities-led sell off earlier in 2016.

A Russian official said Saudi Arabia had proposed that oil-producing countries cut output by up to five per cent each, which boosted the oil price and commodity-related stocks, with the UK Oil and Gas index closing in positive territory, up 1.9 per cent .

Shares in mining companies BHP Billiton and Antofagasta rose 1.4 per cent and 2.3 per cent respectively, while Anglo American jumped more than 9 per cent after the company said it produced more iron ore last year.

Iron ore is one of the biggest earners for Anglo American, which also produces coal, copper, platinum and diamonds.

HONG KONG – Asia’s turbulent session saw China’s shares tumbled again on Thursday, taking January’s losses to about 25 per cent or 13 trillion yuan ($A2.84 trillion), while state media insisted the market ructions did not reflect the real economy.

The benchmark Shanghai Composite Index ended down 2.9 per cent, and the CSI300 index of the largest listed companies in Shanghai and Shenzhen shed 2.6 per cent, both indexes having tumbled this week to levels not seen since 2014.

Trading was very light, as many investors have given up on Chinese stocks, burnt by last summer’s 40 per cent crash and a hair-raising January that has taken indexes back to late 2014 levels.

“The majority of equity investors we met over a four-day marketing trip in ASEAN last week had trimmed exposure to China equities by varying degrees and were waiting for signs of stabilisation for potential re-entry,” said Japanese broker Nomura.

Meanwhile Hong Kong shares were firm despite renewed panic selling on the mainland.

The Hang Seng index rose 0.8 per cent, to 19,195.83, while the China Enterprises Index gained 0.9 per cent, to 8,028.58 points.

Total trading volume of companies included in the HSI index was 2.0 billion shares.

WELLINGTON – The S&P/NZX 50 Index increased 7.76 points, or 0.1 per cent, to 6149.70.

ENERGY

Crude oil prices have risen to their highest in three weeks on hopes for a pact among oil producers to cut output, before backtracking later.

Russian energy minister Alexander Novak and a senior Gulf OPEC delegate suggested that major oil producers may pare production – by as much as five per cent each – in an effort to ease a global supply glut that has hammered oil prices over the past 18 months.

Benchmark Brent futures jumped as much as eight per cent to nearly $US36 a barrel on news of the potential deal. They were last up $US1.14, or 3.44 per cent, at $US34.24 a barrel, at 0748 Friday AEDT. US crude was last up $US1.23, or 3.81 per cent, at $As.53 per barrel.

PRECIOUS METALS

Gold has fallen one per cent, pressured by earlier strength in equity markets on the back of a rally in oil prices, with bullion investors quick to cash in gains from the Wednesday’s rally to 12-week highs.

World stock markets were mixed after Wall Street indexes came off their highs and the US dollar slipped on bets that US interest rate rises will be more gradual than the Federal Reserve has suggested.

Spot gold was down 0.9 per cent at $US1,115.36 an ounce at 3.09 pm EST (0709 Friday AEDT), off a session low of $US1,111.56. US gold futures for February delivery settled down 20 US cents at $US1,115.60 an ounce.

“The initial equity rally generated enough demand for riskier assets that it choked off the oxygen that gold needs to keep going higher,” said James Steel, chief metals analyst for HSBC Securities in New York.

“The FOMC (Federal Open Markets Committee) was positive for gold but I don’t think that necessarily carried into today’s trading.”

“(Gold) did jump very much higher overnight, so we’re seeing some selling into that rally right now,” Mitsubishi analyst Jonathan Butler said.

“We’re getting up towards the $US1,130 level and there’s some fairly significant technical resistance once we get up to $US1,136.”

Spot silver was down 1.6 per cent to $US14.24 an ounce and platinum was down 1.9 per cent at $US863.31 an ounce. Palladium was down 1.8 per cent at $US488.20 an ounce.

BASE METALS

Copper has fallen as the market starts to factor in slower activity in China ahead of the New Year holiday, but expectations of stronger imports by the top consumer in January and a weaker US dollar have helped to limit losses.

Benchmark London Metal Exchange copper ended down 1.3 per cent at $US4,530 a tonne in official rings. The metal used in power and construction touched $US4,595 on Wednesday, its highest since January 8.

Traditionally, China’s industrial sector comes to a halt during the week-long Lunar New Year, which this year starts on February 8. The slowdown typically starts the week before.

“It’s difficult to see higher levels at the moment. Metals trading activity will ease off because of the break,” Citi analyst David Wilson said.

“The arb is open, it was open through December. January copper imports will be pretty strong.”

Three-month aluminium slipped 0.9 per cent to $US1,513 a tonne. The metal is under pressure from an oversupplied market, mainly because China has been ramping up low-cost capacity.

Zinc was down 2.3 per cent at $US1,577 a tonne. The metal hit $US1,616 on Wednesday, its highest since January 4, on expectations of tighter supplies fuelled by surging Chinese imports in December.

Lead was untraded in the rings, but bid at an unchanged $US1,669, tin traded down 1.0 per cent at $US14,250 and nickel lost 0.8 per cent to $US8,590 a tonne.

ASX stocks to watch Friday, January 29

BHP – BHP BILLITON

FMG – FORTESCUE METALS GROUP

RIO – RIO TINTO

Mining company shares will continue to be in focus with the price of iron ore gradually creeping higher, up 20 US cents overnight to $US41.50.

ORG – ORIGIN ENERGY

OSH – OILSEARCH

STO – SANTOS

WPL – WOODSIDE PETROLEUM

Energy companies could have an easier day following a surge in oil prices after a Russian official said OPEC member Saudi Arabia had proposed that oil-producing countries cut output by up to 5 per cent each.

ORI – ORICA

Orica has its annual general meeting on Friday.

AAP