No joke as central banks take easier stance on interest rates

The market rose even as its funny bone was being tickled, writes Gareth Hutchens.

The market rose even as its funny bone was being tickled, writes Gareth Hutchens.

The sharemarket closed higher for the week as global central banks once again took centre stage.

The Bank of England and European Central Bank surprised markets with their dovelike actions, which drew some attention from the US Federal Reserve and its plans for less aggressive monetary policy.

The Fed would have enjoyed the central banks taking an easier stance, market watchers said, because US asset prices could be supported by investors trying to take solace from the easing in Europe.

Australia's Reserve Bank kept rates on hold, at 2.75 per cent, but governor Glenn Stevens still made the headlines.

The day after the RBA's board meeting he made some "light-hearted" comments about the amount of time the board had spent deliberating its rate decision.

Joking board members had deliberated "for a very long time", his comment resulted in Australia's dollar shedding half a cent within moments. Deputy RBA governor Philip Lowe later said Mr Stevens had been "misinterpreted".

For the week, the S&P/ASX 200 gained 39.1 points, or 0.8 per cent, to 4841.7 points, while the broader All Ordinaries gained 51 points, or 1.1 per cent, to 4826.4.

Markets were showing increasing signs of a "perverse" relationship with global quantitative easing programs, fund managers said.

Altius Asset Management chief investment officer Bill Bovingdon said quantitative easing programs had obviously become something of a lifeline for markets but there were signs a "culture of addiction" was growing across other markets, such as bonds. It wouldn't be lost on the US Fed just how perverse the relationship had become, he said.

"Equity markets ... seem to be cheering every bit of weak data because it means they might continue to get the drip feed of more quantitative easing, [but then they] sell off sharply every time it looks like some data which suggests that economies are recovering.

"As bond managers, what we're trying to manage is the cross-current. We think we've got a very broad-based sustainable recovery in the US ... but it will mean QE will have to be tapered at some stage."

For the week, miner BHP Billiton rose 23¢ to $31.60 after it said its new remote operations centre and trial of driverless trucks would boost productivity without sacrificing jobs.

Drilling services company Boart Longyear slipped 17¢ to 50.5¢ after it said earnings could be downgraded further as market conditions deteriorated.

Brambles shed 1¢ to $9.33 after the pallet supplier said it would hive off its underperforming data management business Recall into a separate listed company.

Crown jumped 49¢ to $12.60, while its rival Echo Entertainment slipped 30¢ to $2.76, upon news Sydney would get a second casino from 2019 after the NSW government backed James Packer's proposal for a $1.5 billion hotel and gambling resort.

Flight Centre rose $1.70 to $41.03 after the travel agency said it expected to post a record before-tax annual profit due to strong returns from its Australian and British businesses.

Woodside Petroleum slipped 88¢ to $35.89 after it said it would likely produce less oil and gas this year than previously forecast.

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