THE sharemarket recovered from seven-week lows to close modestly higher. But investors remain anxious about developments in Europe and the US.
The S&P/ASX 200 Index rose 8.6 points, or 0.2 per cent, to 4388.4, while the broader All Ordinaries gained 6.5 points to 4410.7.
Financials gained 0.6 per cent and telecoms added 0.4 per cent, while goldminers fell 1.2 per cent, energy dropped 0.6 per cent and materials shed 0.3 per cent.
Better than expected earnings results in the US, coupled with receding fears that Greece is close to defaulting on its debt, helped maintain a cautious optimism as investors looked for the market to break out of its downward trend.
Banks did most of the heavy lifting, with the big four all posting gains. Commonwealth Bank added 0.7 per cent to $59.09, ANZ jumped 0.6 per cent to $24.20, NAB rose 0.6 per cent to $23.24 and Westpac pushed up 0.2 per cent to $24.85.
Among the miners, Rio Tinto was up 0.3 per cent to $57.85, while rival BHP fell 0.1 per cent to $33.73. Iron ore miner Fortescue jumped 0.8 per cent to $4.
Consumer confidence surged to a 19-month high, with households reacting positively to the Reserve Bank's recent rate cuts, according to a Westpac and Melbourne Institute survey.
As a result, retail stocks enjoyed a small boost, with department store David Jones adding 0.8 per cent to $2.46 while rival Myer gained 0.3 per cent to $2. Harvey Norman was flat at $1.81 and JB Hi-Fi jumped 0.8 per cent to $10.18.
"Everyone is quietly hoping this is going to be the good news that takes us into Christmas. However, I wouldn't put my money on it," said Janine Cox, a Wealth Within analyst.
Webjet shares were hammered after it warned of "very low growth levels" in the travel sector in recent months, despite issuing guidance of at least a 10 per cent increase in profit after tax for this financial year. Shares in the online travel retailer fell 15 per cent to $3.51.
"Stocks like [Webjet] really get slammed in a market like this," Ms Cox said. "They've been so good, the stock has been really solid and they've been trending up nicely. Their strategy has been an open one [but] in this climate, the market can be quite brutal."
Media shares performed well, with Fairfax Media up 4 per cent to 39.5? after it sold its portfolio of US rural magazines.
Seven West Media jumped 2.3 per cent to $1.32, Ten Network rose 1.8 per cent to 28?, APN added 1.6 per cent to 32? and News Corp nudged up 0.3 per cent to $23.60.
The dollar was up half a cent on improved consumer sentiment and weakness in the greenback. Late on Wednesday, the dollar was trading at US104.52?.
Frequently Asked Questions about this Article…
How did the Australian sharemarket perform in the most recent session?
The Australian sharemarket recovered from seven-week lows and closed modestly higher: the S&P/ASX 200 rose 8.6 points (0.2%) to 4,388.4, and the broader All Ordinaries gained 6.5 points to 4,410.7.
Which sectors led gains and which sectors slipped on the ASX?
Financials led the gains (up 0.6%) and telecoms added 0.4%. Sectors that fell included gold miners (down 1.2%), energy (down 0.6%) and materials (down 0.3%).
How did Australia’s big four banks perform and why did they matter to the market rally?
Banks did most of the heavy lifting: Commonwealth Bank rose 0.7% to $59.09, ANZ jumped 0.6% to $24.20, NAB gained 0.6% to $23.24 and Westpac increased 0.2% to $24.85. Their gains helped arrest the market slide and support the modest lift in the index.
What happened with major miners like Rio Tinto, BHP and Fortescue?
Among miners, Rio Tinto was up 0.3% to $57.85, BHP edged down 0.1% to $33.73, and Fortescue jumped 0.8% to about $4.00, showing a mixed performance across the resources sector.
Why did consumer confidence and retail stocks improve?
A Westpac–Melbourne Institute survey showed consumer confidence surged to a 19-month high, with households reacting positively to recent Reserve Bank rate cuts. That helped retail names: David Jones added 0.8% to $2.46, Myer gained 0.3% to $2.00, Harvey Norman was flat at $1.81 and JB Hi‑Fi jumped 0.8% to $10.18.
Why did Webjet shares fall sharply despite forecasting higher profits?
Webjet warned of "very low growth levels" in the travel sector in recent months. Even though it maintained guidance of at least a 10% increase in after-tax profit for the year, the market punished the stock — it fell 15% to $3.51.
How did media stocks perform and what drove their movement?
Media shares largely performed well: Fairfax Media rose about 4% to 39.5 after selling a portfolio of US rural magazines, Seven West Media jumped 2.3% to $1.32, Ten Network rose 1.8%, APN added 1.6%, and News Corp nudged up 0.3% to $23.60.
What external factors helped markets recover and how did the Aussie dollar react?
Better‑than‑expected US earnings and receding fears that Greece was close to defaulting helped create cautious optimism. The Australian dollar also rose, up about half a cent on improved consumer sentiment and US dollar weakness, trading around US104.52¢ late on Wednesday.
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