The fear that kept investors clear of the market only two days ago seemed to disappear yesterday, despite a rise in local unemployment, as market watchers thought it unlikely that Greece would soon default on its debts.
The benchmark S&P/ASX200 index closed up 27.3 points, or 0.66 per cent, at 4171, while the broader All Ordinaries index was up 27.8 points, or 0.65 per cent, at 4262.2.
Unemployment crept up to 5.2 per cent in February, from 5.1 per cent the month before, according to figures from the Bureau of Statistics.
No new full-time jobs were created during the month but 15,400 part-time jobs were lost.
The rise in unemployment largely met expectations and investors took the news in their stride, particularly after the US jobs market added 216,000 private sector jobs in February. That figure helped the US sharemarket close 0.7 per cent higher on Wednesday, which in turn fed through to the local bourse yesterday, helping it bounce back from three consecutive days of losses.
But economists said the rise in Australian unemployment helped to mask a fairly big shift in the labour market.
"The [figure is] very unusual because the national jobs market has been generally flat over the year," Commonwealth Bank senior economist Michael Workman said. "Again, it's the mining versus the 'other states' divide ... the full-time jobs trend is really in line with this pattern that people expected to see, where the resource states are likely to continue to have a net job gain and the states highly exposed to the high currency, where manufacturing sits ... get the job losses."
Energy and materials stocks performed strongest on a day when eight out of 12 industry sectors made gains.
Energy stocks shot up by more than 1.7 per cent while mining stocks rose 0.8 per cent.
Oil and gas major Santos was the top performer among the ASX's 50 companies, with a jump of 54?, or 3.97 per cent, to $14.14.
Fortescue Metals was the next best, jumping 20?, or 3.8 per cent, to $5.51, while market heavyweight BHP Billiton gained 25? to $34.30, and rival Rio Tinto rose 24? to $62.66.
The major banks all made gains. National Australia Bank rose 31?, or 1.3 per cent, to $23.38. CBA rose 38? to $48.04, Westpac rose 11? to $20.41, while ANZ rose 4? to $21.79.
The price of Brent crude finished up slightly, at $US124.21 a barrel, continuing its recent upward trend.
The price of Brent crude has now risen 13 per cent in little over six weeks, from $US109.75 a barrel on January 25.
The head of fixed income at Tyndall Investments, Roger Bridges, said the price of Brent crude was being driven by stronger demand for oil and problems with supply channels, particularly in Iran's Strait of Hormuz.
"A lot of models are showing [the oil price] is reflecting better global demand, which might sound a bit surprising, but it correlates well with the US stockmarket," he said.
A $US11 jump in the price of gold in New York on Wednesday supported Newcrest Mining shares yesterday, which ended the trading day with a gain of 4? to $30.64.
Frequently Asked Questions about this Article…
Why did the ASX bounce back even though Australian jobs data was weak?
The ASX regained ground because the rise in unemployment to 5.2% in February largely met expectations, and stronger global cues helped sentiment. US private sector payrolls added 216,000 jobs and the US sharemarket closed about 0.7% higher, which fed through to local markets. The S&P/ASX 200 closed up 27.3 points (0.66%) at 4,171 despite the jobs numbers.
What did the February Australian unemployment figures reveal and what does that mean for investors?
February unemployment rose to 5.2% from 5.1%. The month showed no net new full‑time jobs and a loss of 15,400 part‑time positions. For everyday investors, this signals a flat national jobs market with sector and state differences — resource states gaining jobs while others, like manufacturing‑exposed states, saw losses — so consider how your portfolio is exposed to those trends.
Which sectors led the market gains and why are energy and materials important right now?
Energy and materials led the gains: energy stocks jumped more than 1.7% and mining stocks rose about 0.8% on the day. Those sectors are driving the market because commodity prices and global demand are relatively strong, and investors are responding to improving prices for oil and certain minerals.
Which ASX companies posted notable gains in this market move?
Several big names outperformed: Santos was the top ASX50 performer (up about 3.97% to $14.14), Fortescue Metals rose to $5.51 (around 3.8%), BHP Billiton traded at $34.30 and Rio Tinto at $62.66. Major banks also gained — NAB to $23.38 (up ~1.3%), CBA to $48.04, Westpac to $20.41 and ANZ to $21.79. Newcrest Mining was supported by stronger gold prices and rose to $30.64 (about 4%).
How did Brent crude movements affect Australian stocks and what drove the oil price higher?
Brent crude finished around US$124.21 a barrel, continuing an upward trend (about a 13% rise since Jan 25). Higher oil supported energy shares — Tyndall Investments’ Roger Bridges attributed the rise to stronger global demand and supply-channel problems, particularly concerns around Iran’s Strait of Hormuz.
What role did US jobs data and global markets play in Australia’s market reaction?
US jobs data helped calm markets: the US private sector added 216,000 jobs in February and the US market closed 0.7% higher, which boosted global risk appetite and helped the ASX bounce back from three days of losses despite local weakness in the jobs report.
Did changes in gold prices affect any Australian mining stocks?
Yes. A roughly US$11 rise in the New York gold price on the day supported Newcrest Mining, which finished trading up about 4% at $30.64. Rising gold often lifts gold‑focused miners' share prices.
After this mixed jobs data and commodity‑driven rally, what should everyday investors watch next?
Keep an eye on upcoming labour market updates, commodity prices (especially oil and gold), and global demand signals. Also watch the state‑by‑state job trends described by economists — resource states may keep adding jobs while manufacturing‑exposed states could lag — because those patterns can affect resource and industrial stocks differently.
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