THE sharemarket put in an impressive performance yesterday, despite further signs of weakness in the economy, as markets across Asia exploited a weak but positive lead from Wall Street before a crucial US Federal Reserve policy meeting.
The benchmark S&P/ASX 200 Index was up 50.9 points, or 1.2 per cent, at 4247.6.
The market enjoyed a boost from technical traders, when the S&P futures broke through last month's high, triggering traders' stop-losses. The event helped propel markets higher across Asia, with the ASX 200 one of the strongest performers.
Healthcare and materials stocks led the way, with every industry sector making gains.
BHP Billiton was up 44?, or 1.3 per cent, at $35.15, and Rio Tinto rose 61? to $64.35.
In the oil and gas sector, Woodside added 4? to $35.90, but Oil Search shed 5? to $6.99, and Santos backtracked 8? to $14.40.
Investors shrugged off any concerns about Chinese growth and instead looked forward to this morning's US Federal Reserve meeting.
Analysts said US Federal Reserve chairman Ben Bernanke would probably keep rates at historic lows, which in turn would support global sharemarkets.
"Job gains in the US have been inching higher and the unemployment rate has been steady at a high level," National Australia Bank head of research Peter Jolly said.
"The US economy has some good momentum, and the [US Fed] will acknowledge that. So they won't do anything to upset the momentum, they'll promise to keep policy accommodative."
Figures from the Australian Bureau of Statistics showed new home loans fell in January for the first time in 10 months.
Considered a leading indicator of the housing market because people get their finances organised before buying a home the value of all home loan lending dropped by 2.3 per cent, with the number of new owner-occupier loans falling 1.2 per cent.
The latest NAB business confidence index, which surveyed 500 businesses between February 20 and 24, showed confidence fell to a five-month low of 0.9 in February.
The banks made solid gains, including Macquarie Bank, which was downgraded by Fitch ratings agency. Investors were unfazed after Macquarie Group said the downgrade related to global market issues, rather than anything specific to Macquarie. Its shares gained 42? to $26.67.
The worst-performing stock on the S&P/ASX 100 Index was retailer JB Hi-Fi, down 17?, or 1.6 per cent, at $10.65.
Frequently Asked Questions about this Article…
Why did the ASX 200 rally even though there were signs of economic weakness?
The ASX 200 climbed after technical traders pushed prices higher when S&P futures broke last month’s high, triggering stop-loss orders. Markets across Asia also followed a weak but positive lead from Wall Street, and investors were optimistic ahead of a US Federal Reserve policy meeting that analysts expected would keep rates at historic lows.
How much did the benchmark S&P/ASX 200 rise and which sectors led the gains?
The S&P/ASX 200 rose by 50.9 points, or about 1.2%, to 4,247.6. Healthcare and materials stocks led the day’s gains, and every industry sector recorded increases.
How did major miners BHP Billiton and Rio Tinto perform during the market rally?
BHP Billiton rallied about 1.3% to $35.15, while Rio Tinto also rose, closing at $64.35 on the day.
What was the performance of oil and gas stocks like Woodside, Oil Search and Santos?
Oil and gas stocks were mixed: Woodside rose to $35.90, Oil Search fell to $6.99, and Santos retreated to $14.40, reflecting varied investor reactions within the sector.
How did investors react to the Fitch downgrade of Macquarie Bank?
Investors largely shrugged off the Fitch downgrade, which Macquarie Group said related to global market issues rather than company-specific problems. Macquarie shares actually gained and finished the day at $26.67.
Did expectations about the US Federal Reserve affect Australian sharemarkets?
Yes. Analysts expected Fed chairman Ben Bernanke to keep policy accommodative and rates at historic lows, and that outlook helped support global sharemarkets and contributed to optimism on the ASX ahead of the Fed meeting.
What recent Australian economic data might be worrying for the housing market?
ABS figures showed the value of new home loans fell 2.3% in January — the first decline in 10 months — with the number of new owner-occupier loans down 1.2%. Those figures are considered a leading indicator for the housing market.
Which stock was the worst performer on the S&P/ASX 100 that day and by how much did it fall?
Retailer JB Hi‑Fi was the worst performer on the S&P/ASX 100, falling about 1.6% to $10.65.
Call 1300 880 160
Start a chat
Schedule a call
