Market powers on with strong US lead
Meanwhile, the Rudd government unveiled a larger than expected budget deficit on Friday, prompting economists to predict further rate cuts.
The benchmark S&P/ASX 200 Index rose 74.8 points, or 1.5 per cent, to 5116.8 points this week, while the broader All Ordinaries Index rose 74.9 points, or 1.5 per cent, to 5098.7.
The ASX 200 has now closed higher for two weeks in a row, while the All Ordinaries has closed higher for six weeks in a row.
The federal government said on Friday that the budget deficit had jumped in the past two months from the $18 billion forecast in the May budget to $30.1 billion in 2013-14, as it struggles to deal with a surprise revenue write-down of $33 billion over the next four years.
The unemployment rate is expected to rise above 6 per cent this year, making it higher than at any time during the financial crisis.
But the government says it has identified $17.4 billion in budget cuts, describing them as "responsible savings".
According to economists, the budget deficit could have been worse without those cuts.
"What the government has chosen to do is a limited amount of extra taxes and a limited amount of spending cuts ... the outcome would have been worse if no changes were made," St George senior economist Hans Kunnen said.
"There is no easy way out. Assets were sold by previous governments to pay down debt. That option is no longer available. Improved economic growth would help. [And] further large-scale stimulatory spending does not appear to be on the political agenda."
For the week, Amcor rose 24¢, at $10.79, after the global packaging group said the time was right to split its Australasia and Packaging Distribution business from its other operations.
Crown jumped 56¢, to $13.26, after the casino operator shook up its senior management team in a move in which its Perth resort boss was promoted at the expense of his Melbourne counterpart.
Rio Tinto rose $2.07, to $59.31, after the mining giant agreed to sell its majority stake in a NSW copper and gold mine to a Chinese company.
Whitehaven Coal slipped 17¢, to $1.96, as falling coal prices dampened the effect of a strong increase in the company's production.
Woolworths slipped 4¢, to $33.57, after the retail giant's sales grew 4.3 per cent to more than $59 billion last financial year.
AGL Energy rose 1¢, to $14.75, on news that the largest solar power project in the southern hemisphere would be built in NSW with funding from the state and federal governments and the energy company.
Frequently Asked Questions about this Article…
The article says the market rallied late in the week after the US stock market hit another record high and the Bank of England and European Central Bank kept interest rates at record lows. Those global cues helped the S&P/ASX 200 rise 74.8 points (1.5%) to 5116.8 and the All Ordinaries rise 74.9 points (1.5%) to 5098.7.
The federal government revealed the 2013–14 budget deficit jumped to $30.1 billion from an $18 billion forecast after a $33 billion revenue write-down over four years. The surprise shortfall prompted economists to predict further interest-rate cuts, according to the article.
The ASX 200 closed higher for two weeks in a row and the All Ordinaries for six weeks, which the article highlights as a short-term positive trend. For investors, sustained weekly gains can signal market momentum, but the article does not make longer-term predictions.
The article states the unemployment rate is expected to rise above 6% this year, higher than at any time during the financial crisis. Investors should watch unemployment because rising joblessness is a key economic indicator discussed in the report.
According to the article: Amcor rose 24¢ to $10.79 after announcing it would split its Australasia and Packaging Distribution business from other operations; Crown jumped 56¢ to $13.26 after a senior management shake-up that promoted its Perth resort boss over the Melbourne counterpart; and Rio Tinto rose $2.07 to $59.31 after agreeing to sell its majority stake in a NSW copper and gold mine to a Chinese company.
The article reports Whitehaven Coal fell 17¢ to $1.96 because falling coal prices dampened the impact of a strong production increase. Woolworths slipped 4¢ to $33.57 even after sales grew 4.3% to more than $59 billion in the last financial year, showing that positive sales figures don’t always immediately lift the share price.
The article notes AGL Energy rose 1¢ to $14.75 after news that the largest solar power project in the southern hemisphere will be built in NSW with funding from the state and federal governments and the energy company.
The government said it had identified $17.4 billion in budget cuts described as 'responsible savings.' Economists quoted in the article (including St George senior economist Hans Kunnen) said the deficit could have been worse without those measures, noting the government chose limited extra taxes and spending cuts and that selling assets to pay down debt is no longer an option.
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