Domestic growth data gives market a boost
THE local market rose 0.7 per cent as hopes for a new debt deal in Europe and forecast-beating economic growth for the September quarter boosted investor appetite.
THE local market rose 0.7 per cent as hopes for a new debt deal in Europe and forecast-beating economic growth for the September quarter boosted investor appetite.The benchmark S&P/ASX200 index eased from earlier highs but closed up 30.5 points, or 0.7 per cent, at 4292.5, while the All Ordinaries rose 29.7 points to 4351.3.Europe's new debt plan, to be presented at this week's leaders' summit, is expected to double the size of the rescue fund for indebted nations and include backing from the International Monetary Fund.The news helped markets shrug off a warning from Standard & Poor's that 15 euro zone nations could face a credit rating downgrade if they fail to reach an agreement. But the City Index analyst Peter Esho noted markets were still struggling to break above the "key" 4300 level as investors remain cautious in the uncertain climate.Markets received a further boost yesterday from data showing the economy grew by 1 per cent in the September quarter. Growth in the quarter to June was revised up to 1.4 per cent. "The domestic economy seems to be cracking along at quite a strong pace," the Commonwealth Bank economist James McIntyre said.Telecoms and healthcare stocks stood out on the day.Telstra rose 4? to $3.25. Mr Esho said the company remained attractive as the telco giant was maintaining its dividend, despite difficult market conditions. Telecom New Zealand added 3.5? to $1.55. Among health stocks, CSL added 1.5 per cent to $32.44 and Ramsay Health Care gained 2.5 per cent to $19.26.Meanwhile, the market is waiting to see if the big banks will pass on the cut in the cash rate by the Reserve Bank. ANZ led the gains among the big banks, rising 1.2 per cent to $21.24. Bank of Queensland rose by 19? to $8.13, despite S&P downgrading its issuer credit rating.BHP Billiton gained 31? to $37.02 and Rio Tinto rose 70? to $66.25. Investors were closely watching BlueScope's $600 million equity issue, pitched at a 34.4 per cent discount to the prevailing share price.Mr Esho said the poor take up of the stock could be a warning to companies looking to raise funds. "When the next company that goes out and tries to raise money, the bankers will be very mindful," he said.Turnover was 1.9 billion shares worth $3.8 billion.