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.
HOW THE MARKET MOVED
YESTERDAY (%)
Energy 1.33
Utilities 1.10
Materials 0.78
Industrials 0.60
Health 0.60
Financials 0.47
Info tech 0.29
Cons disc 0.23
Cons stap -0.08
Telecoms -0.27
These are the percentage moves in the 10 sectors that make up the S&P/ASX 200 Index.
SOURCE: BLOOMBERG
Frequently Asked Questions about this Article…
Why did the ASX hit a 14-month high and what does the S&P/ASX 200 closing level mean for investors?
The Australian sharemarket rose to a 14-month high as the S&P/ASX 200 closed at 4,505.3, up 23.4 points (0.52%). The lift was driven largely by gains in energy and resource stocks and positive price action in China and Hong Kong, which helped push market momentum early in the trading day.
Which sectors led gains on the day and what were the sector movements on the S&P/ASX 200?
Energy and utilities led the advances. The 10 sectors that make up the S&P/ASX 200 moved as follows: Energy +1.33%, Utilities +1.10%, Materials +0.78%, Industrials +0.60%, Health +0.60%, Financials +0.47%, Information Technology +0.29%, Consumer Discretionary +0.23%, Consumer Staples -0.08% and Telecommunications -0.27%.
How did big Australian mining and energy companies perform on the day?
Major mining and energy stocks posted gains. Closing prices reported in the article included BHP Billiton $33.47, Fortescue Metals $3.95, Rio Tinto $55.70, Woodside Petroleum $33.58, Caltex Australia $17.04, Santos $11.66 and Oil Search $7.78.
What happened to the gold price and how did it move that day?
The gold price rose to US$1,777.67 an ounce, an increase of US$9.98 on the day, according to the article.
How did the Australian dollar trade and what factors were driving the currency move?
The Australian dollar traded higher at US102.31¢ (up from US101.63¢). NAB FX co-head Ray Attrill said the dollar started strong based on overnight European trading, with a weaker euro and comments from RBA deputy governor Phillip Lowe helping give the currency a lift. The article also noted BHP Billiton’s Australian-dollar bond offering and some foreign demand as background noise for the currency.
What was overall market activity like — turnover and breadth — on the day the ASX hit the high?
National turnover was 1.53 billion securities worth $3.36 billion. Market breadth showed 522 stocks up, 425 down and 337 unchanged.
How did international markets influence the Australian market rally?
The article says the Australian market gained momentum in line with positive moves in China and Hong Kong. Bargain hunters moved in after the prior day’s losses, while Tokyo was weaker due to a stronger yen. Regional price action in China and Hong Kong was singled out as a key influence on energy and materials strength.
What upcoming data or events should everyday investors watch after this market move?
The article highlights the release of the September labour force data as the next big event for the market. It also notes that market participants were watching speeches from RBA officials, such as comments from deputy governor Phillip Lowe.
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