Market rides up on debt plan for Europe
THE sharemarket added 0.7 per cent yesterday as hopes for a new debt deal in Europe and forecast-beating economic growth data for the September quarter boosted investor appetite.
THE sharemarket added 0.7 per cent yesterday as hopes for a new debt deal in Europe and forecast-beating economic growth data for the September quarter boosted investor appetite.Europe's new debt plan, due to be presented at this week's leaders' summit, would reportedly almost double the size of the region's fund for indebted countries and include increased backing from the International Monetary Fund.The news helped markets shrug off a warning from ratings agency Standard & Poor's that 15 euro-zone countries including Germany could face a credit ratings downgrade if they failed to reach an agreement.But City Index chief market analyst Peter Esho noted that markets were still struggling to break above the "psychologically key" 4300-level as investors remained cautious in the uncertain macro climate.The market received a further boost from data showing the Australian economy grew by a solid 1 per cent in the September quarter. Growth in the quarter to June was also revised up, to 1.4 per cent."The domestic economy seems to be cracking along at quite a strong pace," said Commonwealth Bank economist James McIntyre.The benchmark S&P/ASX 200 Index closed up 30.5 points, or 0.7 per cent, at 4292.5.Telecoms and healthcare shares stood out, with the sectors rising about 1 per cent. Telstra finished up 4?, or 1.3 per cent, at $3.25.Mr Esho said the company remained an attractive investment because it was maintaining its dividend despite difficult market conditions."As rates come down and Telstra maintains that dividend commitment, the spread between the yields is strengthening," he said.Telecom New Zealand added 3.5?, or 2.3 per cent, to $1.55.Among health stocks, CSL added 48?, or 1.5 per cent, to $32.44 and Ramsay Health Care gained 46?, or 2.5 per cent, to $19.26. Meanwhile, the market is still waiting to see if the big banks will pass on the the Reserve Bank's reduction in the cash rate.ANZ led the gains among the big banks, rising 25?, or 1.2 per cent, to $21.24.The others gained between 0.5 per cent and 1 per cent.Shares in Bank of Queensland rose 19?, or 2.4 per cent, to $8.13, even after S&P downgraded its issuer credit rating.Turnover was 1.86 billion shares worth $3.79 billion, with about 13 shares rising for every five that fell.The price of gold in Sydney closed at $US1728.63 an ounce, up $US14.46.