Banking on success as high-yielding stocks boost gains to 20-month high
At the close on Thursday, the benchmark S&P/ASX 200 Index was up 22.4 points, or 0.47 per cent, at 4810.2, while the broader All Ordinaries index gained 21.7 points, or 0.45 per cent, at 4833.8.
The market closed at its highest level since May 2011.
On the ASX 24, the March share price index futures contract was 28 points higher at 4781, with 21,108 contracts traded.
RBS Morgans private client adviser Bill Bishop said many investors were now looking at high-yield stocks such as the major banks and Telstra because of Australia's low interest rates.
"The low interest rates are driving some money out of bank deposits and into the stockmarket," he said. "There's some offshore interest also."
The four major banks all made gains on Thursday.
Commonwealth Bank jumped 57¢ to $63.24, National Australia Bank surged 34¢ to $27.09, Westpac gained 35¢ to $27.10 and ANZ added 6¢ to $26.00.
Telstra was up 1.11 per cent, or 5¢, to $4.56.
However, the mining giants closed mixed.
BHP Billiton gained 10¢ to $37.16 but Fortescue lost 3¢ to $4.63 and Rio Tinto fell 16¢ to $66.29.
Women's fashion retailer Noni B plunged 13.79 per cent to 75¢ after it announced that its interim net profit would fall to between $1.7 million and $1.9 million from $2.4 million in the previous corresponding period.
US stocks closed higher on Wednesday buoyed by strong earnings results in the technology sector and progress in the Washington fiscal budget debate.
The Dow Jones Industrial Average rose 67.12 points (0.49 per cent) to 13,779.33, its highest level since October 2007.
Locally, Sydney gold closed at $US1678.80 a fine ounce, down $US13.55 from Wednesday's close of $US1692.35.
National turnover was 1.61 billion shares worth $3.919 billion, with 460 stocks up, 508 down and 334 unchanged.
The Australian dollar traded lower against a stronger US dollar, despite the release of stronger Chinese manufacturing figures.
Late Thursday, the Australian dollar was trading at US105.14¢, down from 105.39¢ on Wednesday afternoon.
AAP
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The Australian market hit a 20-month high largely because strong gains in high‑yielding stocks — notably the major banks and Telstra — attracted investor money amid low interest rates. The S&P/ASX 200 closed up 22.4 points (0.47%) at 4,810.2 and the All Ordinaries rose 21.7 points (0.45%) to 4,833.8, its highest level since May 2011.
All four major banks finished higher: Commonwealth Bank rose 57¢ to $63.24, National Australia Bank gained 34¢ to $27.09, Westpac added 35¢ to $27.10, and ANZ was up 6¢ to $26.00.
Telstra climbed 1.11% (5¢) to $4.56. According to RBS Morgans adviser Bill Bishop, investors are increasingly looking at high‑yielding stocks like Telstra because Australia's low interest rates are shifting money out of bank deposits and into the stockmarket.
Mining stocks were mixed: BHP Billiton edged up 10¢ to $37.16, while Fortescue fell 3¢ to $4.63 and Rio Tinto slipped 16¢ to $66.29. The sector did not move uniformly higher despite the broader market gains.
Noni B plunged 13.79% to 75¢ after it warned that interim net profit would fall to between $1.7 million and $1.9 million, down from $2.4 million in the previous corresponding period.
National turnover was 1.61 billion shares worth $3.919 billion. Market breadth showed 460 stocks up, 508 down and 334 unchanged.
US shares closed higher — the Dow rose 67.12 points to 13,779.33, its highest since October 2007 — which helped sentiment. Locally, Sydney gold closed at US$1,678.80 an ounce (down US$13.55). Stronger Chinese manufacturing data was noted, but the Australian dollar traded lower against a stronger US dollar, at US105.14¢ down from 105.39¢.
The article cites RBS Morgans private client adviser Bill Bishop saying low interest rates are prompting some investors to move money out of bank deposits and into the stockmarket, particularly into high‑yielding stocks like the major banks and Telstra. He also noted some offshore interest is contributing to flows.
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