GREECE'S passing of tough spending cuts to stave off an economic crisis drove the sharemarket to its strongest rise in a single day this year.
The S&P/ASX 200 Index ended the financial year with its third straight day of gains, a rise of 78.5 points, or
1.73 per cent, to 4608.
Austock senior strategist Michael Heffernan said he was "cautiously optimistic" that the sharemarket would generally continue growing in the new financial year.
He said Greece's financial crisis and the Japanese earthquake had weighed on the Australian sharemarket.
"I'm pretty positive about the market as long as we don't get any of the extraordinary events which we had in the last six months," he said.
The Greek parliament on Wednesday night defied angry protests to approve the slashing of ?28.4 billion ($A38.93 billion) from government spending by 2015. The austerity package had been demanded by Greece's eurozone partners and the International Monetary Fund as a condition for the release of funds needed to avert a debt default.
News of the vote lifted stocks around the globe. On Wall Street, the Dow Jones gained 72.73 points, or
0.6 per cent, to close at 12,261.42 and the broader S&P 500 rose 10.74 points, or 0.83 per cent, to 1307.41.
Last night, the Greek government was set to vote on a bill outlining how the measures would be enforced.
In Australia yesterday, the healthcare and industrials sector led the broader market higher, with health stocks up 2.09 per cent and industrials up 2.42 per cent.
Healthcare company CSL shot up 76?, or 2.4 per cent, to $33.06.
Among the industrials, BlueScope Steel rose 5.5?, or 4.8 per cent, to $1.205 and Brambles advanced 26?, or 3.7 per cent, to $7.22.
The big miners also made strong gains. BHP Billiton climbed 65?, or 1.5 per cent, to $43.80 and Rio Tinto put on $1.46, or 1.8 per cent, to $82.99.
The big four banks all advanced, Westpac rising 44?, or 2 per cent, to $22.26, Commonwealth 93?, or
1.8 per cent, to $52.30, ANZ 40? to $22 and National Australia Bank 44? to $25.62.
Goldminer Newcrest gained 61?, or 1.6 per cent, to $37.71. The spot gold price edged up $US1.54 to finish the Australian session at $US1509.49 an ounce.
Insurance Australia Group firmed 2? to $3.40 after maintaining guidance of an insurance margin between 8 and 10 per cent for 2010-11. This was after it said the Christchurch earthquake would cost it as much as
$65 million in insurance claims. The insurer's industry peers were also higher.
Frequently Asked Questions about this Article…
How did Greece's austerity vote affect the ASX 200 and Australian share market?
News that the Greek parliament approved large spending cuts helped lift global sentiment and sent the S&P/ASX 200 up about 78.5 points (roughly 1.73%) to 4,608, marking the market's strongest single-day rise of the year and the third straight day of gains.
Which sectors led the gains on the Australian market after the Greek vote?
Healthcare and industrials led the rally — the article notes health stocks rose about 2.09% and industrials about 2.42% on the day, helping push the broader market higher.
How did major Australian companies perform on the rally (CSL, BHP, Rio Tinto, BlueScope, Brambles)?
Several big stocks rose: CSL jumped roughly 2.4% to about $33.06; BlueScope Steel gained around 4.8% to about $1.205; Brambles rose roughly 3.7% to $7.22; BHP Billiton climbed about 1.5% to $43.80; and Rio Tinto was up about 1.8% to $82.99.
What was the reaction of Australia's big four banks to the market uplift?
All four major banks advanced: Westpac rose about 2% to $22.26, Commonwealth Bank was up roughly 1.8% to $52.30, ANZ increased to about $22.00, and National Australia Bank moved to about $25.62.
What did market strategists say about the outlook after the Greek developments?
Austock senior strategist Michael Heffernan described himself as 'cautiously optimistic' — positive about continued market growth so long as there are no extraordinary shocks like recent events (for example, the Japanese earthquake) that had weighed on markets.
Did global markets beyond Australia react to Greece approving the austerity measures?
Yes — the article reports global stocks rose: on Wall Street the Dow Jones gained about 72.73 points (0.6%) to 12,261.42 and the S&P 500 rose about 0.83% to 1,307.41 after the vote.
How were gold and gold miners affected during the market move?
Goldminer Newcrest rose about 1.6% to roughly $37.71, and the spot gold price in the Australian session edged up about US$1.54 to finish near US$1,509.49 an ounce.
What impact did recent earthquakes have on insurers and the market according to the article?
Insurance Australia Group (IAG) firmed to about $3.40 after maintaining guidance for an insurance margin of 8–10% for 2010–11; IAG also said the Christchurch earthquake could cost it up to about $65 million in claims. The article also notes the Japanese earthquake had previously weighed on the Australian sharemarket.
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