Rally takes index to 11-week high
THE sharemarket has had its highest close since mid-May, led by mining stocks, as renewed confidence about global growth prospects stoked a broad-based rally.
THE sharemarket has had its highest close since mid-May, led by mining stocks, as renewed confidence about global growth prospects stoked a broad-based rally.All the top 50 stocks advanced, as did all the sub-indices.The S&P/ASX 200 Index climbed 51.1 points, or 1.2 per cent, to 4272.6.The materials sub-index jumped 2.4 per cent, industrials added 1.6 per cent, energy stocks gained 1.1 per cent and financials rose 0.7 per cent.BHP Billiton put on 70?, or 2.2 per cent, to $32 and Rio Tinto surged $2.12, or 4.1 per cent, to $54.13.Fortescue Metals, Australia's third-biggest iron ore exporter, rose 8?, or 1.9 per cent, to $4.26. The miner has secured $US1.5 billion in short-term loans to help fund cost overruns at its Pilbara mine expansion.The dollar, meanwhile, was hovering near a four-month high against the greenback, buying $US1.056. It was also buying 85.37 euro cents, Y82.74 and 67.51 pence.European equities were last night showing healthy gains despite opening weaker. Investors were hoping for further signals on how soon central banks would act to stimulate economic growth and ease the eurozone crisis.The European Central Bank last week offered to step in and buy bonds to bring down the borrowing costs of Spain and Italy. The offer was heavily conditional and markets were originally disappointed by the lack of immediate action, but expectations of decisive moves have now started to rebuild.Telstra and the big banks all gained, as stock prices recovered almost all of Friday's steep falls.Telstra advanced 5?, or 1.2 per cent, to $4.07, its highest close since December 2008.ANZ gained the most among the big four banks, rising 22? or 0.9 per cent, to $23.56. Commonwealth added 40?, or 0.7 per cent, to $56.38, with NAB increasing 17?, or 0.7 per cent, to $25.16, and Westpac firming 15?, or 0.6 per cent, to $23.45.The durability of yesterday's rally, however, remained subject to the signals coming from big overseas economies, said Peter Wright, director of Bizzell Capital Partners."The Europeans are finally talking about a comprehensive policy-style response," he said. "That said, we still have a distinct lack of turnover and volume. That tells you the market isn't totally convinced."