Resilient market continues to make gains
FURTHER promising news on the US economy, and a stay of proceedings for the Greek debt spectacle, gave investors enough confidence to put more money into the sharemarket than they removed this week.
FURTHER promising news on the US economy, and a stay of proceedings for the Greek debt spectacle, gave investors enough confidence to put more money into the sharemarket than they removed this week.Warnings from China's outgoing Premier, Wen Jiabao, that prices in the property market were far from "reasonable" provided the week's biggest downer, igniting fears of a slowdown in the world's third-biggest economy.Large falls in commodity prices only added to concerns, particularly for local resource stocks. But the market was resilient enough to withstand the fears, and it ended the week higher overall.For the week, the benchmark S&P/ASX 200 Index rose 64.2 points, or 1.5 per cent, to 4276.2.More positive jobs data from the US provided further signs this week of a genuine pick-up in economic activity, which cheered investors.The news helped to extend a rally on the US market the Dow Jones rallied for seven straight days, adding 3.5 per cent and to strengthen the greenback against the local currency, if momentarily."It tells us that the momentum of the US recovery is continuing, it's looking like becoming self-sustaining," NAB chief economist Rob Henderson said."A big drag on the US job market in the last year or so has been job shedding at state and local government levels . . . but it appears like that's coming to an end."Meanwhile, investors seemed to lack enthusiasm for news that Greece's second bailout package had finally been settled, and that the European Financial Stability Facility would give the stricken country ?39.4 billion ($A49 billion).After months of angst, when it came time for European officials to shake hands, investors' attention was instead focused on China, with local resource stocks becoming minor casualties of fears about Chinese growth.Over the week, the banking sector performed better than the general market, up 2.3 per cent. Westpac led the majors, up 2.1 per cent, with Commonwealth Bank up 1.8 per cent.