THE sharemarket hit a 14-month high yesterday, closing above the 4500-level for the first time since August last year.
Energy and resource stocks drove the gains, following positive price action in China and Hong Kong.
At the close of trade, the benchmark S&P/ASX 200 Index was up 23.4 points, or 0.52 per cent, at 4505.3.
CMC Markets analyst David Land said the market gained momentum early in the day in line with the China and Hong Kong markets.
"In the markets that have been doing well around the region, the energy sector has had a screamer," Mr Land said.
"It seems to be representative of a return to confidence for the materials sector."
Australian, Chinese and Hong Kong markets rose yesterday as bargain hunters moved in following the previous day's losses, but the Tokyo market was hit by a stronger yen.
Big Australian mining companies and energy stocks all posted gains.
BHP Billiton was up 22? at $33.47, Fortescue Metals was 24? higher at $3.95 and Rio Tinto added 80? to $55.70.
Woodside Petroleum gained 60? to $33.58 and Caltex Australia added 21? to $17.04.
Santos finished 6? higher at $11.66 while Oil Search closed 24? higher at $7.78.
The gold price was $US1777.67 an ounce, up $US9.98.
National turnover was 1.53 billion securities worth $3.36 billion, with 522 stocks up, 425 down and 337 unchanged.
Meanwhile, the dollar was trading higher at US102.31?, up from US101.63? on Monday.
NAB co-head of foreign exchange strategy Ray Attrill said the dollar started off strong yesterday, based on European trading overnight.
"We came into the trading session a bit firmer, and a lot of that was euro-driven," he said.
"The euro was a bit weaker, ahead of the EU finance ministers' meeting, and [German Chancellor] Angela Merkel going to Greece."
Mr Attrill said a speech by RBA deputy governor Phillip Lowe had been watched by the market.
"His comments that the Australian dollar was likely to remain strong in relation to its long-term averages seemed to give the currency a bit of a lift," he said.
"Then there was news that BHP Billiton has made an Australian dollar bond offering for the first time since 2001, and there's a bit of chatter that there's been some decent foreign demand for that."
Mr Attrill said tomorrow's release of the September labour force data would be the next big event for the market.
Frequently Asked Questions about this Article…
Why did the Australian sharemarket hit a 14-month high and what does closing above the 4500 level mean for investors?
The S&P/ASX 200 closed at 4,505.3—its highest level in 14 months—after a broad market lift driven mainly by energy and resource stocks. Closing above the 4,500 mark is a psychological and technical milestone that signals renewed investor confidence, especially after follow-through buying from regional markets such as China and Hong Kong.
Which sectors drove the gains on the ASX and why were energy and materials in focus?
Energy and resources led the rally, with positive price action in China and Hong Kong supporting demand. Analysts noted the energy sector showed strong momentum and that the gains look like a return of confidence to the materials sector—both key drivers of Australian market moves.
Which major Australian mining and energy companies rose, and what were their closing prices?
Several big names posted gains: BHP Billiton closed at $33.47, Fortescue Metals at $3.95, Rio Tinto at $55.70, Woodside Petroleum at $33.58, Caltex Australia at $17.04, Santos at $11.66 and Oil Search at $7.78.
How did the market breadth and turnover look on the day the ASX hit a 14-month high?
National turnover was 1.53 billion securities worth $3.36 billion. Market breadth was positive, with 522 stocks up, 425 down and 337 unchanged, indicating broad participation in the rally.
What happened to the gold price and could that affect commodity and mining stocks?
Gold traded at US$1,777.67 an ounce, up US$9.98. Rising gold prices can support precious-metals miners and investor interest in commodity-related stocks, which can be a positive influence for parts of the materials sector.
How was the Australian dollar performing and what comments influenced its movement?
The Australian dollar was trading higher at US102.31 cents, up from US101.63 cents on Monday. NAB’s Ray Attrill said the dollar started stronger based on European trading and that RBA deputy governor Phillip Lowe’s comments—saying the AUD was likely to remain strong relative to long-run averages—helped lift the currency.
What corporate or market news mentioned in the article might be of interest to investors?
The article notes that BHP Billiton made an Australian-dollar bond offering for the first time since 2001, with some chatter of decent foreign demand. Such corporate funding moves and apparent demand can be relevant for investors watching large-cap miner financing and sentiment.
Are there upcoming economic events investors should watch following the market rally?
Yes—markets were looking ahead to the release of the September labour force data, which the article identified as the next big event likely to influence market direction and investor sentiment.
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