Improved US sentiment helps lock in gains

DOMESTIC shares closed 2.7 per cent higher yesterday, extending their remarkable turnaround the day before, as the market held onto gains triggered by a positive overnight session on Wall Street.

By InvestSMART · 11 Aug 2011

By InvestSMART ·
11 Aug 2011

Comments

DOMESTIC shares closed 2.7 per cent higher yesterday, extending their remarkable turnaround the day before, as the market held onto gains triggered by a positive overnight session on Wall Street.

The benchmark S&P/ASX200 index closed 106.5 points up at 4141.3 points, while the broader All Ordinaries index rose 110.6 points, or 2.7 per cent, to 4207.3.

The local share market opened about 2.5 per cent higher and held onto those gains during the trading day, led by resurgent resources and finance sectors.

An RBS Morgans private client adviser, Bill Bishop, said the market had been buoyed by improved sentiment in the US. "We had a massive upswing on the Dow Jones overnight," Mr Bishop said.

"It was wild but, because we follow Wall Street, we of course were up. We opened strongly and just got stronger. It's a great psychological boost; the market's stabilised a little."

Stocks had finished strongly in positive territory on Tuesday after falling as much as 5 per cent during earlier trading on panic selling influenced by the state of the US and European economies.

The Commonwealth Bank was the weakest performer yesterday among the big four banks, up 95?, or 2.01 per cent, at $48.23 after reporting a 13 per cent rise in full-year net profit accompanied by a cautious outlook statement.

ANZ was 79?, or 4.16 per cent, higher at $19.80, National Australia Bank rose $1.30, or 6.05 per cent, to $22.80, and Westpac climbed 88?, or 4.57 per cent, to $20.14.

Telstra was up 4? at $2.83, while Woolworths added 28? to $25.17.

Resource stocks, too, closed in positive territory. BHP Billiton was up $1.35, or 3.64 per cent, at $38.40, while Rio Tinto rose $2.61, or 3.74 per cent, to $72.35.

The mineral sands miner Iluka Resources was a particularly strong performer, rising $1.78, or 12.45 per cent, to $16.08. Energy stocks gained ground, with Woodside up $1.52, at $36.33, Santos up 45? at $11.90, and Origin up 37? at $13.94. Linc Energy was the best performer in the top 200, with its shares jumping 27.5?, or 13.92 per cent, to $2.25.

The spot price of gold in Sydney closed at $US1746.80 per ounce, down $US7.98 from Tuesday's local close of $US1754.78 per ounce. The gold miner Newcrest Mining was up 53? at $39.25.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What caused the ASX to gain 2.7% and how did the ASX200 close?

Improved sentiment from a positive overnight session on Wall Street helped lift local markets, led by the resources and finance sectors. The S&P/ASX200 closed 106.5 points higher at 4,141.3, while the All Ordinaries rose 110.6 points to 4,207.3.

How did US market moves influence Australian share market sentiment?

A 'massive upswing' on the Dow Jones and a positive session on Wall Street gave Australian investors a psychological boost, helping the market open strongly and hold gains through the day, according to an RBS Morgans adviser quoted in the article.

How did Australia’s big four banks perform during the rally?

All four major banks rose: Commonwealth Bank traded at $48.23 after reporting a 13% rise in full‑year net profit (up about 2.01%), ANZ was higher at $19.80 (up 4.16%), National Australia Bank rose to $22.80 (up 6.05%), and Westpac climbed to $20.14 (up 4.57%).

Which resources stocks led gains on the day?

Major miners BHP Billiton and Rio Tinto were strong, with BHP up $1.35 (3.64%) to $38.40 and Rio Tinto up $2.61 (3.74%) to $72.35. Iluka Resources stood out among smaller miners, rising $1.78 (12.45%) to $16.08, and Newcrest Mining was trading higher at $39.25.

What happened with energy stocks like Woodside, Santos and Origin?

Energy stocks gained: Woodside rose $1.52 to $36.33, Santos was higher at $11.90, and Origin traded up at $13.94, contributing to the broader market lift led by resources and finance.

Which smaller or top‑200 stocks attracted the biggest moves?

Linc Energy was the best performer in the top 200, with its shares jumping to $2.25 — an increase reported at about 13.92% — highlighting how individual stocks can see sharp moves in a positive market session.

Did gold and gold miners react to the market move?

Gold’s spot price in Sydney closed at US$1,746.80 per ounce, down US$7.98 from the prior local close of US$1,754.78, while gold miner Newcrest Mining was trading higher at $39.25.

What practical takeaway should everyday investors get from this market update?

The article shows how US market sentiment can quickly influence the ASX and that resources and financials can lead rallies. Investors should be aware of cross‑market links, company results (for example, Commonwealth Bank’s profit update), and commodity prices when assessing short‑term market moves.