Market makes powerful close to July

THE sharemarket has ended July where it began - with equities marking four straight days of gains - as hopes about central bank action in major economies provided the spark for buyers.

By InvestSMART · 1 Aug 2012

By InvestSMART ·
1 Aug 2012

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THE sharemarket has ended July where it began with equities marking four straight days of gains as hopes about central bank action in major economies provided the spark for buyers.

The S&P/ASX 200 Index rose 23.5 points, or 0.6 per cent, to 4269.2 an 11-week closing high.

July marked the sixth month of gains for the index this year, with the 4.3 per cent increase the best since January. May's 7.3 per cent loss countered much of the year's advance.

Energy stocks gained 1.5 per cent yesterday, financials added 0.6 per cent, materials rose 0.9 per cent, and industrials shed 0.5 per cent.

For the month, the Telstra-dominated telecoms sub-index led gains, rising 8.3 per cent, financials jumped 6.9 per cent, consumer staples 6.7 per cent, and energy stocks added 2.6 per cent.

Investor hopes are being stoked by this week's separate meetings of central bank officials in the US and Europe, with many expecting pledges of greater monetary stimulus to help revive global growth. Signs of slowing growth in Asia have also raised hopes that authorities in Japan, South Korea and Taiwan will join in efforts to spur expansion.

The dollar pushed higher, finishing the Australian session at US105.19?, making a gain for the month of about 3.3 per cent.

The big miners and three of the four major banks all closed higher yesterday. BHP Billiton closed up 30? at $31.93 and Rio Tinto was 90? higher at $53.20. ANZ was up 14? at $23.54, NAB gained 37? to $24.98 and Commonwealth Bank was 33? higher at $57.53. Westpac slipped 6? to $23.20.

Banks were among the best performers for the month, with CBA alone contributing almost a fifth of the S&P/ASX 200's gain. The other three banks, along with Telstra, made up another two-fifths of the advance. Other gainers included Lend Lease, up 12.5 per cent.

Major drags on the index included Fortescue Metals, which lost 16 per cent, as did Iluka Resources.

Shares in Breville Group hit a record $4.78 yesterday after the kitchen appliance maker said it expected full-year earnings to grow by up to 40 per cent.

Origin Energy shares rose 24? to $11.81 after stronger commodity prices drove revenue higher despite lower production levels.

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Frequently Asked Questions about this Article…

How did the S&P/ASX 200 close at the end of July and what was the monthly performance?

The S&P/ASX 200 rose 23.5 points to close at 4,269.2, marking an 11-week closing high. For July the index gained about 4.3%, the sixth month of gains this year, although May’s 7.3% fall offset much of the year-to-date advance.

Which sectors led gains on the day and for the month on the ASX?

On the day energy stocks rose about 1.5%, financials added 0.6% and materials gained 0.9% while industrials fell 0.5%. Over the month the Telstra‑dominated telecoms sub‑index led with an 8.3% rise, financials jumped 6.9%, consumer staples climbed 6.7% and energy added about 2.6%.

What was driving investor optimism at the end of July?

Investor hopes were stoked by separate central bank meetings in the US and Europe where many expected pledges of greater monetary stimulus to revive global growth. Slowing growth in parts of Asia also raised expectations that authorities in Japan, South Korea and Taiwan might take supportive action.

How did the Australian dollar perform in July and what does that mean for investors?

The Australian dollar pushed higher, finishing the Australian session at around US105.19 and recording a monthly gain of about 3.3%. A stronger AUD can affect exporters, commodity revenues and offshore returns for Australian investors holding foreign assets.

How did the big miners and major banks perform at the close?

The big miners closed higher: BHP Billiton finished at $31.93 (up about 30c) and Rio Tinto at $53.20 (up about 90c). Three of the four major banks also closed higher: ANZ rose to $23.54 (up ~14c), NAB to $24.98 (up ~37c) and Commonwealth Bank to $57.53 (up ~33c); Westpac slipped to $23.20 (down ~6c).

Which stocks weighed on the index in July?

Major drags included Fortescue Metals and Iluka Resources, both of which fell about 16% during the month and were significant detractors from the ASX performance.

Were there any notable company-specific moves investors should know about?

Yes. Breville Group hit a record share price of $4.78 after forecasting full‑year earnings could grow by up to 40%. Origin Energy shares rose about 24c to $11.81 after stronger commodity prices boosted revenue despite lower production.

Given the market close and news, what practical steps can everyday investors consider?

Use the close and headlines—central bank signals, currency moves, sector winners and company updates—to review portfolio exposure. Check sector allocations (banks, miners, telecoms, energy), reassess holdings that moved sharply (positive or negative), and consider diversification or professional advice rather than reacting to a single session.