Sharemarket closes at a 15-month high, buoyed by miners and good news from Spain.
THE sharemarket closed at a 15-month high yesterday, buoyed by miners following a rise in commodity prices and a boost in sentiment after Spain avoided a credit downgrade.
The benchmark S&P/ASX 200 jumped 36.7 points, or 0.8 per cent, to 4528.2.
Among the sectors, mining stocks led the way, gaining 1.6 per cent, financials added 0.5 per cent, industrials were 1.5 per cent higher and energy rose 0.9 per cent. Consumer staples bucked the trend, falling 0.2 per cent.
The market got an early boost after credit rating agency Moody's held Spain's debt rating at Baa3, just above junk status.
''Europe really got a bolt, on both the affirmation of Spain's ratings and the fact that the Germans may be a little more lenient with some of their enforcement of the rules and regulations, probably relaxing a little bit ahead of an election,'' said Suncorp Bank analyst Darryl Conroy.
The miners enjoyed a rebound, with BHP saying it would press ahead with plans to increase iron ore output despite the price weakening. BHP gained 1.1 per cent to $33.45, while Rio Tinto added 1.7 per cent to $56.05. Fortescue jumped 5.7 per cent to $4.07.
Gold was trading around $US1751 an ounce. Australia's biggest goldminer, Newcrest, rose 1.1 per cent to $27.62.
The dollar pushed over the US103? mark, buying US103.1? in late trade, giving the Reserve Bank more incentive to cut interest rates again next month.
''[We're] still very aggressively priced in for rate cuts it has us sneaking under 2.5 per cent by June next year, which is a pretty hectic speed for cuts,'' Mr Conroy said.
''[But] I don't see these eventuating, I expect the journey to be a bit slower. There are still a couple of positives out there.''
The banks performed reasonably. ANZ added 0.7 per cent to $25.96, Westpac also rose 0.7 per cent, to $25.89, NAB jumped 0.6 per cent to $26.79, while CBA fell 0.2 per cent to $56.99.
Of the worst 10 performers on the ASX 200, three were media stocks after several brokers downgraded the sector.
Ten Network lost 7.5 per cent to 31?, Fairfax Media fell 5.1 per cent to a new low of 37.5? and APN News & Media slipped 4 per cent to 26.5?.
''It's a tough road with the shifting of the sands for [the media sector] and it's probably going to experience it for some time to come,'' Mr Conroy said. ''Channel Nine has highlighted a few risks for that sector more broadly.''
It wasn't all bad news for the sector, with News Ltd shares adding 1.1 per cent to $24.54 after Rupert Murdoch beat a protest vote over his dual role as chairman and chief executive at News' AGM in the US.
Frequently Asked Questions about this Article…
What pushed the ASX to a 15-month high and how did the S&P/ASX 200 perform?
The ASX closed at a 15-month high as miners rebounded on firmer commodity prices and sentiment was lifted after Spain avoided a credit downgrade. The benchmark S&P/ASX 200 jumped 36.7 points, or 0.8%, to 4,528.2.
Which sectors led the gains on the day and which sectors lagged?
Mining stocks led the market, rising about 1.6%. Industrials were up roughly 1.5%, energy gained about 0.9% and financials added 0.5%. Consumer staples was the exception, slipping around 0.2%.
How did major miners like BHP, Rio Tinto and Fortescue trade on the rally?
Major miners enjoyed a rebound: BHP rose about 1.1% to $33.45, Rio Tinto gained about 1.7% to $56.05, and Fortescue climbed roughly 5.7% to $4.07 as investors responded to stronger commodity sentiment.
What did BHP say about iron ore production and why does that matter for investors?
BHP said it will press ahead with plans to increase iron ore output despite weakening prices. For investors, that signals the company is prioritising volume growth, which can influence revenue and the broader iron ore supply outlook.
How did gold and Australia’s big gold miner perform during the session?
Gold was trading around US$1,751 an ounce, and Newcrest — Australia’s biggest gold miner — rose about 1.1% to $27.62, benefiting from the firm gold price.
Did Spain’s credit rating decision affect Australian market sentiment?
Yes. Moody’s decision to hold Spain’s debt rating at Baa3 (just above junk) boosted global risk sentiment, which helped lift European markets and gave the Australian sharemarket an early positive leg.
What was said about interest rate expectations and the Australian dollar?
The Australian dollar pushed over the US103¢ mark (about US103.1¢ in late trade), which the article said could give the Reserve Bank more incentive to cut interest rates. Suncorp Bank analyst Darryl Conroy noted markets are aggressively pricing in rate cuts (under 2.5% by next June), but he expects the pace of cuts to be slower than priced in.
Why did media stocks weigh on the ASX 200 and what happened at News Ltd’s AGM?
Several brokers downgraded the media sector, leaving three media stocks among the ASX 200’s worst performers (for example, Ten Network fell about 7.5% and Fairfax dropped around 5.1% to a new low). Despite sector weakness, News Ltd shares rose about 1.1% to $24.54 after Rupert Murdoch defeated a protest vote over his dual role as chairman and chief executive at News’ AGM.
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