Renewed hopes for US economy lift market
THE local bourse posted its second straight day of gains after a rise on offshore markets sparked hopes for a pick-up in the world economy.
THE local bourse posted its second straight day of gains after a rise on offshore markets sparked hopes for a pick-up in the world economy.Shares ended near their highest point in four weeks as a growing belief in the health of the US economy sparked a wave of optimism in global markets and trumped concerns over Europe's debt crisis."Some analysts are even redirecting their sentiment and encouraging a 'forget Europe, buy US stocks' mentality," CMC Markets trader Andrew May said.At the close yesterday, the benchmark S&P/ASX 200 index was up 35.3 points, or 0.85 per cent, at 4187.5, while the broader All Ordinaries rose 36.3 points to 4242.9. The March share price index futures contract was up 41 points at 4163 with 25,544 contracts traded.Yet volumes remained light, with 1.6 billion shares traded at a value of $3.5 billion, as investors remained cautious of committing money to the market ahead of Spanish bond auctions and a European Central Bank policy meeting tonight.A slump in jobs vacancies data did little to encourage investors, who remain wary over the health of the economy as they mulled the fallout from Europe."Over the past six weeks or so we've only seen two days of gains in a row three times so that's a good sign," CommSec analyst Steven Daghlian said. "But we're still seeing investors not keen to lock up too much of their funds at the start of the year and there's a lot of volatility in the market."BHP Billiton rose 1.5 per cent to $36.18 and Rio Tinto gained 1.6 per cent to $64.19.Shares in African Iron jumped 40 per cent to 56? after South African miner Exxaro announced plans to buy the Republic of the Congo-focused miner for $338 million.Santos lagged the energy sector after it said it would shut production from its Mutineer-Exeter oilfield, the latest company to be disrupted by tropical cyclone Heidi.The financials sector rose 0.7 per cent, with Commonwealth Bank and National Australia Bank both up 0.3 per cent, at $49.94 and $23.57 respectively. The ANZ rose 1.6 per cent to $21.08 and Westpac was the biggest gainer of the big four at $20.63, up 2.1 per cent on the day.Mr Daghlian said investors would be keeping an eye on earnings from J.P. Morgan in the US tomorrow night, the first of the big US banks to release results. "That could set the tone from the banking sector for the next few weeks," he said.Among the biggest losers yesterday were the telecoms stocks, which lost 1.7 per cent as investors favoured of riskier assets.