Shares rally on US sales, Europe hopes
THE sharemarket ended its six-trading-day losing streak with firm gains yesterday as hopes mounted that European leaders were closer to finding a solution to the region's debt crisis. Strong US Thanksgiving sales also boosted the local market.
THE sharemarket ended its six-trading-day losing streak with firm gains yesterday as hopes mounted that European leaders were closer to finding a solution to the region's debt crisis. Strong US Thanksgiving sales also boosted the local market.IG Markets market strategist Stan Shamu warned that it could just be a relief rally in what would prove to be a prolonged bear market.After hitting a seven-week low on Friday, the S&P/ASX 200 Index rebounded to close up 73.9 points, or 1.85 per cent, at 4058.2.Mr Shamu said a report in the Italian newspaper La Stampa suggesting the International Monetary Fund could offer Italy financial aid also boosted investor sentiment, although some analysts said the fund did not have such resources.US Thanksgiving retail sales topped estimates, marking a strong start to the Christmas trading season, boosting Australian and Asian markets."The financial and materials heavyweights are leading the charge," Mr Shamu said. "However, volume remains thin, suggesting some investors are wary of the potential for the European debt crisis to eclipse strong US Thanksgiving sales."National Australia Bank was the strongest of the major banks, up 92?, or 4.2 per cent, at $22.74. Westpac jumped 76?, or 3.9 per cent, to $20.26, Commonwealth Bank added $1.50, or 3.3 per cent, to $46.89, and ANZ put on 43?, or 2.3 per cent, to $19.20.Among the industrials, Transurban Group added 15? to $5.47, while Brambles gained 13? to $6.84.Qantas forecast a fall in first-half underlying profit by as much as 66 per cent because of higher fuel costs and industrial disputes. It finished up 5? at $1.505.Rio Tinto said market sentiment had worsened because of Europe's debt woes and economic weakness in the US. It advanced $1.32 to $63.27.During a teleconference, BHP Billiton chief executive Marius Kloppers said the European debt crisis was hampering trade finance. BHP climbed 80?, or 2.4 per cent, to $34.85.Rare-earths miner Lynas Corporation was the best performer on the S&P/ASX 50 Index, up 6.8 per cent at $1.175. The worst performer was Woodside Petroleum, following the downgrade of its 2012 oil and gas production targets on Friday. It fell 76? to $32.60.The spot gold price in Sydney was $US1706 an ounce, up $US19.67 from Friday.National turnover was 1.89 billion shares worth $4.14 billion, with 565 stocks up, 439 down and 350 steady.