Hopes for EU growth lift investor spirits
HINTS that Europe and China will do more to lift economic growth helped the sharemarket regain a little more of the ground lost in Friday's plunge.
HINTS that Europe and China will do more to lift economic growth helped the sharemarket regain a little more of the ground lost in Friday's plunge.The materials sector rallied strongly, with mining and energy shares among the best performers as investors continued to react positively to "pro-growth" comments from G8 leaders on the weekend, and a pledge from China's Premier Wen Jiabao to promote economic activity.The view that political events in Greece had improved slightly also helped bolster investor confidence.The S&P/ASX 200 Index closed up 47.4 points, or1.2 per cent, at 4121.The dollar rose to finish at US99.20?, up from US98.36? on Monday.National Australia Bank's head of research, Peter Jolly, said the currency was supported by the same positive mood that boosted sharemarkets on Monday.Also helping sentiment, Mr Jolly said, were Greek opinion polls that suggested the country's electorate might be pulling back from the political precipice, and speculation that today's European Union leaders meeting would do something to promote growth."[But Chinese Premier] Wen's comments are the most tangible piece of news and mean we will get more fiscal and monetary ease ahead, but they do also confirm the Chinese economy has been softer than anticipated," he said.IG Markets market strategist Shan Shamu said investors were positioning themselves for possible positive news following the European Union summit.Official sentiment in the eurozone was moving away from complete austerity measures and towards pro-growth policies, while Wen Jiabao had been reported as pledging to promote growth, Mr Shamu said."I think one reason we are seeing this buying is that everyone wants to position themselves ahead of that summit," he said. "If they come up with comments that might be bullish for markets, no one wants to miss."Every sector was up yesterday, except for information technology stocks.BHP Billiton rose 22? to $32.32 while Rio Tinto gained 94?, or 1.7 per cent, to $56.89.Oil Search led the oil sector higher, climbing 15?, or2.2 per cent, to $6.87. Woodside put on 32? to $31.31 and Santos rose 31? to $12.31.Leighton Holdings surged 65?, or 3.7 per cent, to $17.94 despite posting a quarterly net loss. The company reassured investors it would report a full-year profit of $400-$450 million.The big banks traded in positive territory, led by NAB, which gained 31? to $23.91.