Market upbeat on US deadlock hopes
Friday's rally helped the local market close nearly 0.5 per cent higher for the week, not bad given the previous four days had been dominated by talk of a seemingly deadlocked US Congress.
"Investors are piling back in," Australian Stock Report head of research Geoff Saffer said on Friday.
"Today's gains are being driven by the first sign of compromise in the US debt ceiling political deadlock."
For the week, the benchmark S&P/ASX 200 gained 22.9 points, or 0.4 per cent, at 5230.9 points, while the broader All Ordinaries gained 23 points, or 0.4 per cent, at 5228.8 points.
Market watchers were surprised that local investors had been reacting so calmly during the week to all the uncertainty about the state of US politics. Some put it down to complacency, others to the feeling that we have seen this before in the US and that it is nothing new.
Then late in the week, global equity markets surged as House Republicans in the US proposed to raise the US debt ceiling until November 22, but not to reopen the government.
It provided the "good news" investors were waiting for.
Meanwhile, economists said news that US Fed vice-chairman Janet Yellen - a co-architect with Ben Bernanke of the Fed's response to the global financial crisis - had been confirmed as the nomination to replace Mr Bernanke was viewed well by markets.
For the week, Bank of Queensland gained 52¢, or 4.9 per cent, at $11.10, after the bank lifted its full-year cash profit to $251 million due to a reduction in bad debts.
Cash Converters slipped 4¢, or 3.6 per cent, at $1.21. The lender and second-hand goods retailer is facing a class action for allegedly charging extremely high interest rates.
Leighton Holdings is up $1.05, or 6.3 per cent, at $17.79, despite its bribery scandal prompting Melbourne investor Mark Elliott to sue the construction giant.
Westpac Bank is up 57¢, or 1.8 per cent, at $32.99, after it announced that it would pay $1.45 billion to purchase Lloyds Banking Group's Australian motor and equipment finance business.
Woodside Petroleum is up 10¢, at $38, after it announced that it had started its $5 billion North Rankin redevelopment project and exported its first gas to the Karratha gas plant.
Transurban gained 24¢, or 3.5 per cent, at $7.04. The toll road owner has recorded a 14 per cent rise in revenue for the three months to the end of September, thanks in part to the end of upgrade work on Sydney's M2 Motorway.
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The local market jumped after news that US politicians looked likely to avoid a collision over the debt ceiling. A proposed plan by House Republicans to raise the US debt ceiling until November 22 — combined with the positive market reaction to Janet Yellen's nomination as Fed chair — gave investors the “good news” they were waiting for and helped drive a late-week rally.
For the week the benchmark S&P/ASX 200 rose 22.9 points, or 0.4 percent, to 5,230.9 points. The broader All Ordinaries also gained 23 points, or 0.4 percent, to finish at 5,228.8 points.
Market watchers noted local investors had reacted calmly throughout the week despite US political uncertainty. Some attributed this to complacency, while others felt investors treated it as a familiar issue — until the late-week proposal on the debt ceiling spurred more buying.
Bank of Queensland gained 52 cents, or 4.9 percent, to $11.10 after lifting its full-year cash profit to $251 million. The bank said the profit increase was driven in part by a reduction in bad debts, which investors rewarded with higher share buying.
Cash Converters slipped 4 cents, or 3.6 percent, to $1.21 amid news the lender and second-hand goods retailer is facing a class action alleging it charged extremely high interest rates — a legal overhang that weighed on the stock.
Leighton Holdings was up $1.05, or 6.3 percent, to $17.79. The rise came even though the company faced a bribery scandal that prompted Melbourne investor Mark Elliott to sue the construction giant, showing that markets sometimes look past legal issues in the short term.
Westpac climbed 57 cents, or 1.8 percent, to $32.99 after announcing it would pay $1.45 billion to purchase Lloyds Banking Group’s Australian motor and equipment finance business — a deal seen as strategic growth for its lending operations.
Woodside Petroleum rose 10 cents to $38 after starting its $5 billion North Rankin redevelopment and exporting its first gas to the Karratha gas plant. Transurban gained 24 cents, or 3.5 percent, to $7.04 after reporting a 14 percent rise in revenue for the three months to the end of September, helped by the completion of upgrade work on Sydney’s M2 Motorway.
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