Hint of European resolve brings late rally
THE sharemarket posted gains in a late rally yesterday as investors grew confident that European leaders would resolve the region's debt crisis.
THE sharemarket posted gains in a late rally yesterday as investors grew confident that European leaders would resolve the region's debt crisis.After teetering between gains and losses all day, the benchmark S&P/ASX200 Index closed 43.9 points higher, or 1.1 per cent, at 4102.Global rating agency Fitch delivered positive news for Australian investors, upgrading the country's foreign currency issuer default rating from AA to AAA, the highest possible rating for its overseas borrowings.Australia now has a AAA rating from all three ratings agencies Standard and Poor's, Fitch and Moody's.But America's financial state continued to worsen, with Fitch lowering the US debt outlook from "stable" to "negative".Shares slumped after Treasurer Wayne Swan's midyear economic update, but were quick to rebound.The federal government plans to deliver a $1.5 billion surplus next financial year, less than half the $3.5 billion forecast in its May budget.Patersons Securities associate director Mark Goulopoulos said the federal government's economic growth downgrade for 2012 was unlikely to affect the Australian sharemarket."Domestic issues have taken a back seat to the European situation. The debt crisis is left, front and centre and probably will be for the next week."He said the December 9 European Union summit would give investors more clarity. "It is a bit of a question of waiting and seeing what happens. These are very abnormal times, it is very much a headline-driven market, rumours are enough to move the market."Energy stocks rose 1.2 per cent and the big four banks had another strong day, with financials rising 1.5 per cent.Westpac added 19? to $20.45, Commonwealth Bank was up 48? at $47.37, ANZ was up 31? at $19.51 and National Australia Bank added 36? to $23.10.Coca-Cola Amatil performed badly yesterday, shedding 29? to $11.57.The spot gold price closed at $US1713.01 an ounce in Sydney, up $US7.01 from $US1706 on Monday.BHP Billiton gained 13? to $34.98 and Rio Tinto rose 23? to $63.50. Despite Monday's announcement that Qantas expected a big rise in fuel costs, the airline's shares went up 1? to $1.52.Stocks missing the rally included Fortescue Metals, which lost 1 per cent, APN News, which shed almost 4 per cent, and Sundance, which fell 6.3 per cent.National turnover was 2.06 billion shares worth $4.34 billion, with 562 stocks up, 438 down and 375 unchanged.