Market shrugs off weak jobs data

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 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.

Related Articles