What you need2know:

• SPI futures up 48 pts at 5273

• AUD at 88.29 US cents, 95.55 Japanese yen, 69.39 Euro cents and 54.68 British pence

• S&P 500 +1.5%, Dow +1.7%, Nasdaq +1.8%

• In Europe, Euro Stoxx 50 -0.9%, FTSE -0.2%, CAC -1%, Dax -1%

• Spot gold up 0.8% to $US1218.43 an ounce

• Iron ore slips 0.2% to $US80.18 per metric tonne (out of Qingdao port)

• Brent oil down 0.7% to $US91.55 per barrel

What’s on today

Australia employment/unemployment data; US weekly jobless claims, wholesale inventories; French and German trade balance; UK official bank rate; ECB monthly bulletin.

Stocks to watch

David Cassidy, chief strategist, UBS Securities Australia: “We note significant underperformance for cyclical $US earners Incitec Pivot, James Hardie Industries and Sims Metal Management. Of these, Incitec Pivot is most our preferred. Among defensive $US earners we note Crown Limited has been a big underperformer and appears to be discounting a lot of bad news in our view."

Deutsche Bank has advised investors to “buy” media giant News Corporation with a 12-month price target of $22.00 a share.

Morningstar raised Pacific Brands to “accumulate” with a fair value of 56¢ a share, with fair value uncertainty at “high”, reflecting the company’s powerful customer base, risks in executing its retail strategy and foreign exchange volatility.

Currencies

The US dollar fell to a two-week low against the euro on after minutes of the latest Federal Reserve policy meeting focused on the downside risks to the US economy, suggesting the central bank could take its time in raising interest rates.

The greenback trimmed gains versus the yen and dropped to a one-week low against the Swiss franc following the release of the Fed minutes, which had a dovish slant.

"The minutes verbalized the notion that a strong dollar could act as a de facto tightening of monetary policy, effectively doing some of the Fed's heavy lifting," said Omer Esiner, chief market analyst, at Commonwealth Foreign Exchange in Washington.

"Such a scenario would buy the Fed more time before raising borrowing costs. Any excuse the Fed can hide behind in not raising lending rates in a timely manner will hurt the dollar."

Commodities

Iron ore with 62 per cent iron content out of Qingdao port, China, was down 0.2 per cent at $US80.18 a tonne.

Brent crude has slid into a bear market on concern rising global supplies will be more than enough to meet slowing demand. Futures closed 21 per cent below their June peak, meeting the common definition of a bear market.

Copper edged higher in London on Wednesday on a short-covering rally after an uptick in Chinese equities, though the metal remained not far off five-month lows on longer-term concerns about economic growth in China and Europe.

"Base metals are generally stuck in a downward trend," said William Adams, head of research at Fast Markets.
"Copper supply is picking up. Higher treatment and refining charges should encourage smelters to increase utilisation rates, and if that happens at the same time as a slowdown in China and Europe, it's going to be a headwind."

United States

US stocks turned sharply higher in afternoon trade as investors interpreted the latest Fed minutes as a sign the central bank will continue efforts to bolster growth.

Federal Reserve policy makers at their last meeting said a global slowdown and a stronger dollar posed potential risks to the outlook for the US economy.

A number of participants said growth “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.

Billionaire activist investor Carl Icahn tweeted on Wednesday, saying he would send an open letter to Apple on Thursday. “Tmrw we’ll be sending an open letter to @tim_cook. Believe it will be interesting,” he tweeted through his handle @Carl_C_Icahn. Apple shares were up 2pc in afternoon trade.

Europe

European stocks sank on Wednesday, extending their week-long selloff and with a benchmark index hitting its lowest level since mid-August as mounting concern about global economic growth spooked investors.

In further downbeat news for Germany, the OECD said its composite leading indicators point to a slowdown in German growth and a report said the country’s top economic institutes would on Thursday cut their forecast to an expansion of just 1.3 per cent from the previous forecast of 1.9 per cent.

What happened yesterday

Fears about slowing global economic growth dragged the Australian sharemarket lower on Wednesday but the losses were trimmed by a partial recovery in the big banks.

The benchmark S&P/ASX 200 slipped 42.9 points, or 0.8 per cent, to 5241.3. The broader All Ordinaries dropped 51 points, or 1 per cent, to 5241.6.

Commonwealth Bank lost 1 per cent to $75.02, while NAB dipped 0.7 per cent to $32.15. ANZ dropped 0.7 per cent to $31.30, while Westpac finished 0.4 per cent lower at $32.28.