Resources and financials lead modest recovery
THE stockmarket regained lost ground yesterday, driven by a rebound in resource and finance stocks, on hopes China could take steps to stimulate growth and after world leaders reaffirmed they wanted Greece to remain in the eurozone.
THE stockmarket regained lost ground yesterday, driven by a rebound in resource and finance stocks, on hopes China could take steps to stimulate growth and after world leaders reaffirmed they wanted Greece to remain in the eurozone.The benchmark S&P/ASX200 index rose 27.1 points, or 0.7 per cent, to 4073.6, posting its first rise in five sessions, while the broader All Ordinaries index added 25.6 points, or 0.6 per cent, to 4124.4.The gains were led by a 1.6 per cent rise in the materials sector and a 0.6 per cent gain among financials. Energy inched up 0.1 per cent, while industrials slipped 0.2 per cent.The dollar drifted off lows and was trading around US98.5?, helped by firmer regional markets, but investors remained cautious about developments in the eurozone ahead of a European Union summit this week.G8 leaders meeting at the weekend vowed to take all necessary steps to combat financial turmoil, but they offered no specific prescription for Greece, which holds fresh elections in June.Michael Heffernan, senior client adviser at Lonsec, said: "We overdid it on Friday and now we are rebounding with the lead that we got from overseas, in that it looks like the Greek situation is not going to be armageddon."IG Markets's Stan Shamu said there would need to be more positive days before some investors return to the market."It just seems like investors are happy to stay on the sidelines until we start seeing some traction after the recent sell-off," Mr Shamu said in a research note. "Last week's 5.3 per cent drop was more than enough to spook investors, and a couple of successive sessions of gains might be the best way to lure investors from the sidelines."BHP Billiton and Rio Tinto led gains, after being sold off heavily last week on fears turmoil in Europe would weigh on demand for commodities. Resources were also boosted by calls by China's premier on Sunday for efforts to support growth. BHP climbed 64?, or 2 per cent, to $32.10, while gold miner Newcrest advanced 1.9 per cent, or 47?, to $25.50."If China says yes to more easing, then bang, the resources stocks are going to be up," said Mr Heffernan.National Australia Bank was the best performer of the big banks, rising 28? to $23.60.Qantas closed steady at $1.43 after it said it would axe more than 500 jobs in Victoria, saving it up to $100 million a year. Shares in printer PMP gained more than 8 per cent, or 3?, to 40?, after the company confirmed ticketing and labelling group TMA was behind a takeover bid worth up to $250 million.Elders was down 0.5? at 20? after saying the outlook for agriculture was positive and a large tax win helped the agribusiness group return to profitability.