Index scores fourth straight monthly gain

The S&P/ASX 200 gained 1.4% in April — its fourth consecutive monthly rise — and has risen 8.4% since the start of the year. The index also closed up 34.5 points (0.8%) at 4,396.6 yesterday. For everyday investors, that signals improving market sentiment driven by banking and resource stocks, but it’s still important to watch company-level news and macro events that could change momentum.

Investors were encouraged by the expectation of an RBA rate cut and by softer US GDP data, which some strategists said increased the chance of additional central bank support globally. That boosted risk appetite and lifted the market, even though some firms announced profit downgrades. Views differ, though — some strategists think further US quantitative easing is unlikely, so market direction will depend on upcoming policy moves and data.

Major banks rallied: NAB, Commonwealth, ANZ and Westpac all rose, with reported share prices of $25.23 (NAB), $51.97 (Commonwealth), $23.91 (ANZ) and $22.73 (Westpac). NAB’s gain followed an announcement it would restructure its loss-making UK operation — a business decision tied to a reported 15.6% fall in the group’s first-half profit — which investors viewed as addressing underperformance.

Industrial services group Spotless agreed to a full takeover by private equity firm Pacific Equity Partners at $2.71 a share. Spotless shares rose to about $2.56 on the news. Everyday investors holding Spotless should note the agreed takeover price and any upcoming shareholder vote or scheme details announced by the company or bidder.

Kagara, a gold, copper and silver miner, appointed voluntary administrators after its shares plunged more than 68% over the past three months. Its stock has also been in a trading halt at about 12 cents for more than a week. For shareholders this is high-risk: voluntary administration typically signals severe financial stress and can lead to restructuring, sale or insolvency outcomes.

Resources helped lift the market — BHP Billiton rose to $35.55 and Rio Tinto to $66.35. Strength in major miners supported the broader index, contributing alongside bank gains to the market’s positive close. Resource stock performance can be an important driver for the ASX, so investors should track commodity and company-specific news.

Societe Generale strategist Sebastien Galy said weaker US GDP increased the odds of further Fed support, boosting global risk appetite. By contrast, Commonwealth Bank currency strategist Joe Capurso argued additional QE looked unlikely, noting the US recovery is patchy and the Fed would not rush into a QE3 program. Investors should watch US economic releases and central bank commentary for signs of policy shifts.

The market was positioned for a highly anticipated RBA rate cut, and the Housing Industry Association urged the RBA to slash the cash rate by 50 basis points in one move after new-home sales fell to their lowest in more than a decade. Rate decisions and housing data are key for property-exposed investors and can influence bank and consumer-exposed stocks.