Investors favour banks, miners as jitters ease
The benchmark S&P/ASX 200 Index was up 72.2 points, or 1.5 per cent, at 4881.7. The broader All Ordinaries was up 68.9 points, or 1.44 per cent, at 4866.5.
The market has recovered all of the heavy losses incurred in the three days after the US Federal Reserve indicated it might soon begin withdrawing stimulus measures. That was a sign people were becoming more accepting and forgiving of the idea that bond buying to stimulate economies could stop, IG market strategist Chris Weston said.
"If the Fed is coming out of the market, maybe it is coming out for a reason and they see growth that is based on organic growth," he said. "It seems equities have got their mojo back."
The best performers were the banks and miners, which represent about half of the market. Westpac shares were up 61¢ at $28.95, NAB gained 55¢ to $29.42, ANZ added 53¢ to $28.66 and Commonwealth was $1.15 higher at $70.14.
Macquarie Group also performed well, adding $2.03, or 4.9 per cent, to $43.51.
Among the miners, BHP shares were up 66¢ at $31.61 and Rio Tinto was 40¢ higher at $52.04.
But shares in major goldminer Newcrest Mining were down 16¢ at $9.74, continuing its bad run as the price of the precious metal falls.
Telstra also fell, losing three cents to $4.76.
The Sydney gold price was $US1257.22, up $US35.52 from $US1221.70 on Monday.
National turnover was 1.4 billion securities worth $3.9 billion.
The dollar was higher due to stronger than expected inflation data out of China. At 5pm on Tuesday it was trading at US91.83¢, up from US90.58¢ on Monday.
During trade on Tuesday, the dollar dropped after the release of the National Australia Bank monthly business survey. It showed business conditions in June had slumped to their lowest level in four years.
But Chinese consumer price index figures released at the same time helped the currency to make a sharp recovery, OzForex chief currency strategist Jim Vrondas said.
The data showed China's annual inflation accelerated to 2.7 per cent in June, ahead of market expectations of 2.5 per cent.
Frequently Asked Questions about this Article…
The benchmark S&P/ASX 200 jumped 72.2 points (about 1.5%) to 4,881.7 as investors appeared to shrug off jitters after the US Federal Reserve hinted it might begin withdrawing stimulus. The article says the market recovered losses from the three days after the Fed comment, which market strategists interpreted as growing confidence that any tapering might reflect stronger organic growth — a sign equities regained momentum.
Banks and miners were the best performers and together make up roughly half the market. Strong gains in major bank stocks and miners drove much of the index lift, so everyday investors tracking market direction should note that moves in these sectors can have an outsized effect on overall ASX performance.
Major banks rose strongly: Westpac added $0.61 to $28.95, NAB gained $0.55 to $29.42, ANZ rose $0.53 to $28.66, and Commonwealth Bank was $1.15 higher at $70.14. Macquarie Group also had a solid session, up $2.03 (4.9%) to $43.51.
Among miners, BHP was up $0.66 to $31.61 and Rio Tinto rose $0.40 to $52.04, contributing to the market’s overall gains that day.
The article reports Newcrest Mining shares fell $0.16 to $9.74, described as continuing a bad run amid falling precious metal prices. At the same time the Sydney gold price was reported at US$1,257.22 — up US$35.52 from US$1,221.70 on Monday. Investors should note gold prices and gold-miner share performance can move differently day-to-day, so watch both the metal price and company fundamentals.
Telstra shares slipped three cents to $4.76 on the day. For everyday investors, a small daily fall in a large telecom stock can matter for income-focused portfolios, but it’s one data point among many, and the article only reports the single-session move.
The Australian dollar was higher overall, trading at US91.83¢ at 5pm (up from US90.58¢). It dipped during trade after the NAB monthly business survey showed business conditions in June slumped to their lowest in four years, but then recovered strongly after Chinese CPI data surprised on the upside — China’s annual inflation accelerated to 2.7% in June — which helped the AUD rebound, according to OzForex strategist Jim Vrondas.
National turnover that session was 1.4 billion securities worth $3.9 billion, and the All Ordinaries rose 68.9 points to 4,866.5. Turnover and index breadth are useful indicators for investors: higher turnover can signal stronger participation and conviction behind a move, while multiple indices rising suggests a broader market lift rather than isolated stock moves.
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