The sharemarket put in an impressive performance yesterday, despite further signs of weakness in the local economy, as markets across Asia exploited a positive lead from Wall Street before a crucial Federal Reserve policy meeting.
The benchmark S&P/ASX200 index was up 50.9 points, or 1.2 per cent, at 4247.6, while the broader All Ordinaries rose 48.3 points, or 1.1 per cent, to 4336.5.
The local bourse enjoyed a boost from technical traders about mid-morning when the S&P futures broke through February's high, triggering traders' "stop losses". The event helped propel markets higher across Asia, with the ASX200 one of the strongest performers.
Healthcare and materials stocks led the way with every local industry sector making gains, but some companies failed to capitalise on the positive mood.
BHP Billiton was up 44?, or 1.3 per cent, at $35.15, and Rio Tinto rose 61? to $64.35. In the oil and gas sector, Woodside rose 4? to $35.90 but Oil Search shed 5? to $6.99, and Santos fell 8? to $14.40.
Investors shrugged off any concerns about Chinese growth and instead looked forward to this morning's meeting by the Federal Reserve.
Analysts said the Fed chairman, Ben Bernanke, would probably keep rates at historic lows, which in turn would support global sharemarkets.
"Job gains in the US have been inching higher and the unemployment rate has been steady at a high level," the research head at NAB, Peter Jolly, said.
"The US economy has some good momentum and the [Fed] will acknowledge that [in their meeting], so they won't do anything to upset the momentum, they'll promise to keep policy accommodative."
New figures from the Australian Bureau of Statistics show new home loans fell in January for the first time in 10 months. Considered a leading indicator of the housing market - because people get their finances organised before buying a home - the value of all home loan lending dropped by 2.3 per cent, with the number of new owner-occupier loans falling 1.2 per cent.
The latest instalment of the NAB business confidence index, which surveyed 500 businesses between February 20 and 24, showed confidence fell to a five-month low of 0.9 last month, below the long-run average of 6.4.
The major banks made solid gains, including Macquarie Group, whose banking arm was downgraded by Fitch ratings agency. Investors were unfazed after Macquarie Group said the downgrade related to global market issues, rather than anything specific to Macquarie. Macquarie shares rose 42? to $26.67.
The worst performing stock on the S&P/ASX 100 index was retailer JB Hi-Fi, down 17? at $10.65.
with AAP
Frequently Asked Questions about this Article…
What drove the ASX200's strong performance in the latest trading session?
The article says the S&P/ASX200 rose 50.9 points (about 1.2%) as markets across Asia followed a positive lead from Wall Street. A technical break in S&P futures through February’s high triggered stop-loss orders, helping push the ASX200 higher, and healthcare and materials sectors led overall gains.
Which sectors and companies led gains on the Australian sharemarket during the rally?
Healthcare and materials stocks led the market higher, with major miners like BHP Billiton (about $35.15) and Rio Tinto (about $64.35) rising. Major banks also made solid gains, including Macquarie Group, despite a downgrade to its banking arm.
How did oil and gas stocks perform and which energy names moved noticeably?
Performance was mixed in the oil and gas sector: Woodside rose to about $35.90, while Oil Search and Santos fell (Oil Search to about $6.99 and Santos to about $14.40), according to the article.
Why were investors paying close attention to the Federal Reserve meeting?
Investors were focused on the Fed meeting because analysts expected Fed chairman Ben Bernanke to keep interest rates at historic lows. That expectation of continued accommodative policy was seen as supportive for global sharemarkets.
What US jobs and economic signals were influencing market sentiment?
The article reports that US job gains were inching higher while the unemployment rate remained steady at a high level. NAB research head Peter Jolly said the US economy had some momentum and the Fed was likely to acknowledge that without upsetting that momentum.
What did recent Australian housing data from the ABS indicate and why does it matter for investors?
ABS figures showed the value of new home loan lending fell 2.3% in January—the first monthly fall in 10 months—and new owner‑occupier loan numbers dropped 1.2%. As a leading indicator for the housing market, this can signal cooling activity that investors may factor into housing-related stocks and economic outlooks.
What did the NAB business confidence index reveal about Australian business sentiment?
The NAB business confidence index, based on a survey of 500 businesses, fell to a five-month low of +0.9 in the latest reading, below the long-run average of +6.4. That suggests business sentiment had weakened relative to its longer-term norm.
How did company-specific news affect individual stocks like Macquarie Group and JB Hi‑Fi?
Macquarie Group shares rose to about $26.67 despite its banking arm being downgraded by Fitch; Macquarie said the downgrade related to global market issues rather than anything specific to the company. By contrast, retailer JB Hi‑Fi was the worst performer on the S&P/ASX100 that day, falling to about $10.65.
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