Signs of economic sunshine lift stocks
THE sharemarket posted its second straight day of solid rises after gains overseas sparked hopes for a pick-up in the world economy.
THE sharemarket posted its second straight day of solid rises after gains overseas sparked hopes for a pick-up in the world economy.The S&P/ASX 200 Index closed 35.3 points, or0.85 per cent, higher at 4187.5 near its highest in four weeks.Growing evidence that the US recovery is strengthening 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," said CMC Markets trader Andrew May.Yet volumes remained light, with 1.6 billion shares traded at a value of $3.7 billion, as investors remained wary about committing money in the run-up to bond auctions in Spain and a policy meeting of the European Central Bank tonight.A slump in Australian job vacancies data did little to encourage those still wary about the health of the economy as they mulled the continuing fallout from Europe.Welcoming the market's back-to-back gains, CommSec market analyst Steven Daghlian said that in the past six weeks there had been only three occasions when this had happened. "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," he said.The materials sector rose 1.6 per cent, leading the market higher after strength in commodity prices overnight. It was closely followed by a 1.4 per cent gain in energy stocks.BHP Billiton closed up 1.5 per cent at $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 mining company Exxaro announced plans to buy the Republic of Congo-focused miner for $338 million.Newcrest, which hit a low of $29.51 at the end of last month, added to recent gains with a rise of 57? to $US32.75 as gold moved higher. At the close in Australia, spot gold was up $US16.49 at $US1636.25 an ounce.The financials sector put on 0.7 per cent. Mr Daghlian said investors would be keeping an eye out for earnings from JPMorgan in the US tomorrow night, when it would become the first of the big US-based banks to release results."That could set the tone from the banking sector for the next few weeks," he said.Among the day's biggest losers were the telecoms stocks, which lost 1.7 per cent as investors pulled out money from the traditionally defensive industry in favour of riskier assets.