Rebound gathers pace as confidence grows
The mood on the market improved another notch yesterday, weeks after hints that Europe and China would do more to lift economic growth.
The mood on the market improved another notch yesterday, weeks after hints that Europe and China would do more to lift economic growth.The materials sector rallied strongly, mining and energy shares being among the better performers as investors reacted positively to ostensibly "pro-growth" comments from G8 leaders at the weekend, and a pledge from China's Premier, Wen Jiabao, to promote economic activity.The view that political events in Greece had improved slightly also helped bolster investor confidence.The S&P/ASX200 index closed up 47.4 points, or 1.2 per cent, at 4121, while the All Ordinaries was up 49.1 points, or 1.19 per cent, at 4173.5.The Australian dollar rose slightly to finish at US99.20?, up from US98.36? on Monday.Peter Jolly, head of research at National Australia Bank, said the currency was supported by the same positive mood that had boosted sharemarkets the day before. The latest Greek opinion polls, which suggested the country's electorate might be pulling back from the political precipice, and speculation that today's meeting of European Union leaders would do something to promote growth, also had a positive effect, he said."[Chinese Premier] Wen's comments are the most tangible piece of news and mean we will get more fiscal and monetary ease ahead, but they do also confirm the Chinese economy has been softer than anticipated," he said.Stan Shamu, a strategist from IG Markets, said investors were positioning for possible positive news from the European Union summit today.Sentiment in the eurozone was moving away from austerity measures and towards pro-growth policies, while Mr Wen was reported as pledging to promote growth, Mr Shamu said. "I think one reason we are seeing this buying is that everyone wants to position themselves ahead of that summit," he said. "If they come up with comments that might be bullish for markets, no one wants to miss."Every sector was up yesterday, with the exception of info tech stocks.Market heavyweight BHP Billiton rose 22? to $32.32, while Rio Tinto gained 94?, or 1.7 per cent, to $56.89.Oil Search led the oil sector higher, adding 15?, or 2.2 per cent, to $6.87. Rival Woodside Petroleum increased 32? to $31.31 and Santos climbed 31? to $12.31.Leighton Holdings surged 65?, or 3.7 per cent, to $17.94 despite posting a quarterly loss. The firm reassured investors it would report a full-year profit of between $400 million and $450 million.The major banks traded in positive territory, led by NAB, which gained 31? to $23.91.Bank of Queensland surged 19?, or 3 per cent, to $6.49.Gold major Newcrest Mining fell 26?, or 1 per cent, to $25.24 following falls in the price of gold overnight.The spot price of gold in Sydney finished at $US1587.78 per ounce, down $US6.75.Retailer David Jones lost 3? to $2.20.National turnover was 1.67 million securities worth $4.75 billion.