THE sharemarket closed higher yesterday, buoyed by bargain hunters who helped to make up ground from the previous day's loss.
Official figures showing slower than expected wages growth helped calm inflationary expectations and also provided a boost for investors.
The S&P/ASX 200 Index gained 56.6 points, or 1.33 per cent, to 4303.9.
Macquarie Private Wealth director Lucinda Chan said Australian Bureau of Statistics wages data for the June quarter grew by a less than expected pace. She said this showed an easing of inflationary pressures and made it more likely the Reserve Bank would keep interest rates steady next month.
"That's one reason why the market got a little bit excited today, plus we had some strong earnings from companies," she said.
Ms Chan said that with world markets slowing and a resolution to the US and European debt crises still a long way off, any greater gains on the market would be limited.
"We lost a lot over the last week, a huge amount in the market," she said. "We've seen a bit of bargain-hunting today and that has lifted the market. We've recovered the losses we made yesterday." The shopping centre owner Westfield Group rose 6? to $8.20 despite posting a 32 per cent fall in half-year profit. Among energy stocks, Woodside Petroleum gained 44? to $37.76, despite an 8.1 per cent dip in first-half net profit.
A fellow oil and gas producer, Santos was up 21? at $12.14 and Oil Search was 7? stronger at $6.48.
Among the miners, BHP Billiton gained 39? to $39.82 and Rio Tinto was $1.03, or 1.4 per cent, higher at $74.42.
The major banks closed higher, making up losses in early trade, with Westpac up 26? to $20.51 a day after posting a 2 per cent fall in third-quarter cash earnings due to slowing credit growth.
National Australia Bank was 15? up at $23.36. ANZ gained 23? to $20.58 and Commonwealth Bank was 57? higher at $47.40. The building materials manufacturer Boral slid 19? to $3.69 despite revealing full-year net profit of $167.7 million after the previous year's loss, but it said the outlook for US housing remained poor.
The transport group Brambles was up 29? at $6.93 after announcing plans to offload its information management subsidiary and use the proceeds to reduce debt and invest more than $US500 million ($A478.65 million) on its pallets operations.
The price of gold in Sydney closed at $US1787.15 per fine ounce, up $US17.82 from Tuesday's local close.
Frequently Asked Questions about this Article…
Why did the S&P/ASX 200 rise yesterday and what drove bargain-hunting on the ASX?
The S&P/ASX 200 gained 56.6 points to finish at 4,303.9 as bargain-hunters stepped in to make up ground from the prior day’s loss. Slower-than-expected wages growth reported by the ABS eased inflationary expectations and, along with some strong company earnings, helped lift investor sentiment.
How did the Australian Bureau of Statistics wages data affect interest-rate expectations?
ABS wages growth in the June quarter was slower than expected, which Lucinda Chan of Macquarie Private Wealth said showed easing inflationary pressures. That made it more likely the Reserve Bank of Australia would keep interest rates steady next month, supporting the market rally.
Which energy stocks moved on the day and what results were reported?
Energy stocks were stronger: Woodside Petroleum rose to $37.76 despite reporting an 8.1% dip in first-half net profit. Santos closed at $12.14 and Oil Search at $6.48, with the sector helping support the broader market lift.
How did major miners perform on the trading day?
Miners were firmer: BHP Billiton gained to $39.82, while Rio Tinto was $1.03 higher (about 1.4%) at $74.42, contributing to the overall gains on the ASX.
What happened with the big four banks during the rally?
The major banks closed higher after earlier losses. Westpac traded at $20.51 a day after reporting a 2% fall in third‑quarter cash earnings due to slowing credit growth. National Australia Bank was $23.36, ANZ $20.58 and Commonwealth Bank $47.40.
Why did Westfield Group shares rise despite a fall in profit?
Westfield Group shares rose to $8.20 even though it reported a 32% fall in half‑year profit. The share rise occurred amid the broader bargain‑hunting and improving market sentiment reported that day.
What corporate update moved Brambles’ share price and how did the market react?
Brambles announced plans to sell its information management subsidiary and use the proceeds to reduce debt and invest more than US$500 million (A$478.65 million) in its pallets operations. The stock rose to $6.93 after the announcement.
What happened to the gold price in Sydney on the day?
The gold price in Sydney closed at US$1,787.15 per fine ounce, up US$17.82 from Tuesday’s local close, according to the article’s market summary.
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