Investors positive ahead of Fed meeting
The benchmark S&P/ASX 200 Index gained 47 points, or 0.98 per cent, to 4861.4, while the broader All Ordinaries Index gained 47.2 points, or 0.98 per cent, to 4841.8.
Federal Reserve chairman Ben Bernanke was to update the market overnight in the US, and investors are keen for an update on the Fed's $US85 billion ($89 billion) a month asset purchase program, known as quantitative easing (QE).
The Fed has indicated the bond purchases will continue until the outlook for the US job market improves substantially, but investors want a clearer timetable.
"With the marquee event of the week now imminent, traders have been positioning for a QE-friendly stance from Bernanke," CMC Markets senior trader Tim Waterer said.
But any notice from the Fed that it will begin pulling back on economic support would be bad for markets, he said.
"While the ASX 200 undoubtedly enjoyed a productive session, if Bernanke does not tell the market what it wants to hear this evening then today's gains could quite easily be reversed."
Almost all sectors of the market rose on Wednesday, although the banks were slightly weaker.
"Materials stocks were among the highlights on the Australian market today, while the energy sector found confidence from the strengthening oil price," Mr Waterer said.
Rio Tinto added 83¢ to $54.38 and BHP Billiton gained 30¢ to $32.99. Woodside Petroleum rose 82¢ to $35.65, Oil Search gained 16¢ to $8 and Santos was 15¢ higher at $12.80.
Among the banks, Westpac lost 22¢ to $29.23, Commonwealth Bank dropped 13¢ to $68.36, ANZ shed 3¢ to $28.35 and National Australia Bank gained 30¢ to $30.04.
The spot price of gold in Sydney finished at $US1369.24 an ounce, down $US9.66.
Meanwhile, the dollar recovered from early weakness to end little changed as traders marked time before the Fed meeting.
Late on Wednesday, the Aussie was trading at US94.91¢, after trading as low as US94.34¢.
A winding back of the Fed's QE program would suggest the end of near-zero short-term rates in the US is also getting closer.
Frequently Asked Questions about this Article…
The sharemarket gained ground: the S&P/ASX 200 rose 47 points (0.98%) to 4,861.4, and the All Ordinaries also gained 47.2 points (0.98%) to 4,841.8.
Investors were waiting for Federal Reserve chairman Ben Bernanke to give an update on the Fed's $US85 billion a month asset purchase program (quantitative easing). Traders had been positioning for a QE-friendly stance, and were seeking a clearer timetable for how long bond purchases would continue.
According to the article, any notice from the Fed that it will begin pulling back on economic support could be bad for markets and might reverse recent gains. A winding back of QE would also suggest the end of near-zero short-term interest rates in the US is getting closer.
Materials stocks were among the highlights, and the energy sector also found confidence from a stronger oil price. Most sectors rose, while the major banks were slightly weaker overall.
Rio Tinto added 83¢ to finish at $54.38, BHP Billiton gained 30¢ to $32.99, Woodside Petroleum rose 82¢ to $35.65, Oil Search gained 16¢ to $8.00, and Santos was 15¢ higher at $12.80.
The banks were mixed but slightly weaker overall: Westpac lost 22¢ to $29.23, Commonwealth Bank dropped 13¢ to $68.36, ANZ shed 3¢ to $28.35, and National Australia Bank gained 30¢ to $30.04.
The spot price of gold in Sydney finished at US$1,369.24 an ounce, down US$9.66. Investors who follow precious metals as a safe-haven or inflation hedge often watch gold moves closely, especially ahead of major central bank announcements like the Fed meeting.
The Aussie recovered from early weakness and ended little changed, trading at US94.91¢ after dipping as low as US94.34¢. Investors were marking time ahead of the Fed update—any clear signal on QE or interest-rate timing could influence the AUD.
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