Market rebound on hopes rates will fall
At the close on Thursday, the benchmark S&P/ASX 200 Index was up 39.1 points, or 0.79 per cent, at 5007.1. The broader All Ordinaries was 36.6 points, or 0.74 per cent, stronger at 5010.3.
The rally was driven by the financial sector, which rose 1.3 per cent. Energy added 0.8 per cent, consumer staples gained 1.2 per cent and industrials 0.4 per cent. Offsetting the gains was the materials sector, which fell 0.7 per cent.
Buying, especially in interest-rate sensitive stocks, picked up after data showed employment fell a steeper than expected 36,100 in March, raising the odds of another rate cut by the Reserve Bank.
Official figures showing the unemployment rate hitting a 3-year high of 5.6 per cent in March fuelled hopes the RBA could start cutting rates again soon.
Financial stocks rebounded from falls during the previous session to lead the market higher.
"The banks provided the ballast while the rest of the market wilted over the course of the trading session," CMC Markets strategist Michael McCarthy said.
ANZ closed 44¢ higher at $28.69, while Commonwealth Bank lifted 75¢ to $68.05, National Australia Bank improved 40¢ to $31.60 and Westpac advanced 60¢ to $31.53.
Weaker commodities prices put pressure on resources players, with goldminers faring the worst.
"There's increasing nervousness in commodity pricing, particularly that weakness in gold," Mr McCarthy said.
Juliette Saly, market analyst at CommSec, said it was encouraging to see the local market trading around the 5000-point mark.
Goldminers were weaker after the bullion price slipped 1.5 per cent as the market digested plans by Cyprus to sell reserves to raise cash. Newcrest dropped 19¢ to $19.56, OceanaGold fell 15¢ to $2.43 and Alacer Gold lost 7¢ to $3.60.
Among other resources stocks, BHP Billiton dropped 28¢ to $33.40, and Rio Tinto lost 25¢ to $58.03. Elsewhere, retailer Woolworths rose 48¢ to $34.37 on news of a 2.5 per cent rise in quarterly sales to $14.4 billion. Coles owner Wesfarmers firmed 42¢ to $40.54.
The dollar hit a fresh 10-week high, but lost ground following disappointing jobs figures. Late on Thursday it was trading at US105.21¢, up from US105.09¢ on Wednesday.
Frequently Asked Questions about this Article…
The S&P/ASX 200 rose 39.1 points (0.79%) to 5,007.1 as buying picked up after weak employment data increased hopes the RBA might cut rates. The rally was led by the financial sector (up 1.3%) with energy, consumer staples and industrials also contributing, while materials lagged.
Official figures showed employment fell by 36,100 in March and the unemployment rate rose to a three-year high of 5.6%. That weaker jobs data boosted expectations the Reserve Bank could cut interest rates again, prompting buying in interest-rate-sensitive stocks.
Major banks rebounded and helped lift the market: ANZ rose about 44 cents to $28.69, Commonwealth Bank gained about 75 cents to $68.05, National Australia Bank improved about 40 cents to $31.60, and Westpac advanced about 60 cents to $31.53.
Resources stocks were under pressure as commodities softened, with materials down 0.7%. Gold miners fared worst after the bullion price slipped 1.5% amid news Cyprus planned to sell reserves. Newcrest fell about 19 cents to $19.56, OceanaGold dropped about 15 cents to $2.43, and Alacer Gold lost about 7 cents to $3.60.
BHP Billiton eased about 28 cents to $33.40 and Rio Tinto slipped about 25 cents to $58.03, reflecting the weaker commodity-price environment that weighed on resources names.
Yes. Woolworths rose about 48 cents to $34.37 after reporting quarterly sales increased 2.5% to $14.4 billion, and Coles owner Wesfarmers firmed around 42 cents to $40.54, helping consumer-staples gains.
CMC Markets’ strategist Michael McCarthy said the banks provided ballast as the rest of the market wilted during the session, while CommSec analyst Juliette Saly said it was encouraging to see the local market trading around the 5,000-point mark.
The Australian dollar hit a fresh 10-week high earlier in the week but lost ground after the disappointing jobs figures. Late on Thursday it was trading around US 105.21 cents, slightly up from US 105.09 cents the previous day.
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