Index at seven-week high on Fed promise
THE sharemarket ended at a seven-week high yesterday, led by the resource and materials sector.
THE sharemarket ended at a seven-week high yesterday, led by the resource and materials sector.The US Federal Reserve's pledge to keep interest rates low until 2014 increased Australian investors' appetite for riskier stocks.The benchmark S&P/ASX 200 Index closed up 17.1 points, or0.4 per cent, at 4288.4.IG Markets market strategist Stan Shamu said the Australian market performed well after tentative opening gains following the Australia Day public holiday on Thursday."Rates might be on hold in the US until late 2014, which was really cheered by markets," Mr Shamu said. "The high-beta [riskier] stocks are doing quite well, we are quite leveraged to growth."We saw a massive rally in commodities as well following the FOMC [the Fed's Open Market Committee] meeting and that has extended to the resources here."BHP Billiton closed up 24? at $37.66, Rio Tinto added $1.43, or2.1 per cent, to $69.78 and Fortescue Metals shot up 20?, or 4.1 per cent, to $5.06.Woodside Petroleum closed up 51?, or 1.5 per cent, at $34.48 after confirming it was considering a partial sell-down of its interest in the $US30 billion Browse liquefied natural gas project in Western Australia.Newcrest shot up $1.25, or3.8 per cent, to close at $34.40 in response to the sharp rise in gold that followed the announcement from the Fed.At the close, spot gold was at $US1719.15 an ounce, up $US50.83 from Wednesday's close of $US1668.32.The big banks lost some of their earlier gains. Westpac dipped 1? to $21.29, Commonwealth Bank advanced 16? to $51.16, ANZ firmed 8? to $21.50 and NAB shed 12? to $24.08.The only sectors to finish weaker were defensives including consumer discretionaries, consumer staples, info techs and telcoms, which closed between 0.3 and 0.6 per cent softer.US-based sleep-disorder specialist ResMed put on 19? to $2.73.