Investors fuel rise with faith in banks
THE local market rose for a third straight day yesterday, the longest winning run since June 7, as investors bet that central banks would step up efforts to stoke global growth.
THE local market rose for a third straight day yesterday, the longest winning run since June 7, as investors bet that central banks would step up efforts to stoke global growth.The S&P/ASX 200 benchmark index rose 35.9 points, or 0.9 per cent, to 4245.7 - the highest close since May 15. With one day to go, the index is up 3.7 per cent, placing it on course for its best monthly gain since January.Financial stocks were among the best performers, with the big four banks contributing almost half the index's gain.Commonwealth Bank closed at a 26-month high, adding $1.02 to $57.20. Westpac rose 26? to $23.26, ANZ added 32? to $23.40, and NAB increased 36?, to $24.61.Telstra touched $4 for the first time since December 2008 before easing back to close 2?, or 0.5 per cent, higher at $3.98.US Federal Reserve officials meet tomorrow to discuss monetary policy, which investors hope will include indications of another round of stimulus for the slowing US economy. European officials also meet later this week, with similar expectations swirling about extra stimulus and other efforts to contain borrowing costs for major members such as Italy and Spain.The dollar, meanwhile, eased back from a four-month high of just under US105? earlier in the day to close at US104.65?. The local market opened higher after advances on Friday on Wall Street and European markets. Australia's gains were mid-range in the region, with most markets higher.European political and financial heads said they were prepared to do everything to protect the single currency, comments that helped buoy European stocks for a third straight session in early trading.CMC Markets analyst Ric Spooner said European leaders' comments buoyed risk assets, with investors happy to push up Australian banks stocks if they thought the cost of borrowing would drop.Important Chinese manufacturing figures are due out tomorrow and will raise anxiety about resource stocks if they are weak.Fortescue Metals was one miner to lose ground amid doubts about how it would fund cost blowouts on its expansion project.Falling iron ore prices are adding to concerns for the sector, with prices sinking almost 15 per cent in the past 13 trading days.