Index ends third straight week of gains

The S&P/ASX 200 rose as investors grew more optimistic after successful debt auctions in Europe eased concerns about sovereign debt (helping Spanish bond yields fall) and forecast-beating results from US banks such as Morgan Stanley and Bank of America suggested the US economy may be recovering. Those factors, combined with stronger commodity prices and positive company earnings, pushed the benchmark up 24.8 points to 4239.6 and about 1% for the week.

Energy stocks were the day's biggest gainers, rising about 1.1%. Notable moves included Woodside Petroleum (up roughly 1.5% to $33.99), AWE (up about 4.2% to $1.38) and Beach Energy (up about 5% to $1.475), driven by sector-wide positive sentiment in the market that day.

Resource stocks gained around 0.9%, supported by rising metals prices, strong production reports from the iron ore sector and reports of increased merger and acquisition activity among Brazil's miners. BHP Billiton firmed to about $37.48 and Rio Tinto rose roughly 1.8% to $67.53, reflecting the stronger commodity backdrop.

Nexus Energy shares initially surged — at one point up about 22% after trading resumed — when it announced a non-binding heads of agreement with Shell and Osaka Gas to develop an integrated oil and gas project at the Crux field off Western Australia. The stock later fell back and closed up about 6% as investors assessed the deal, including its timing and terms.

No. The announcement noted that revenue from the Crux project is likely to be pushed back, potentially as far as the next decade, so investors should not expect immediate material revenue from that agreement.

Although China’s manufacturing sector contracted for the third straight month in January, investors largely shrugged it off in this session. Positive developments in Europe and upbeat US bank earnings appeared to outweigh the negative China data for that trading day.

AMP Capital’s head of investment strategy Shane Oliver said investors and markets aren’t ignoring the bad news; rather, ratings downgrades and warnings from organisations like the World Bank and IMF have largely been factored into prices already, which helps explain why markets were able to rally.

The article highlights that market sentiment can be influenced by a mix of geopolitical and economic developments — such as successful European debt auctions, strong US bank results and rising commodity prices — and that individual stock moves (like Nexus Energy’s reaction to a deal) can reflect both news flow and timing of expected revenues. Everyday investors should note how broad macro drivers and company-specific announcements combined to lift the ASX on this occasion.