Stocks back on their upward path

THE sharemarket resumed its advance yesterday as investors took heart from better than expected economic data and a rosier outlook for the troubled eurozone.

By InvestSMART · 5 Jul 2012

By InvestSMART ·
5 Jul 2012

Comments

THE sharemarket resumed its advance yesterday as investors took heart from better than expected economic data and a rosier outlook for the troubled eurozone.

The S&P/ASX 200 Index closed with a gain of 45 points, or 1.1 per cent, at 4172.2.

CMC Markets senior trader Tim Waterer said the market followed a positive lead from the US.

US stocks had been boosted overnight by a Commerce Department report that factory orders were up 0.7 per cent in May from April, while US car companies said sales rose last month.

European stocks and the euro rose on the prospect that central banks would act to boost economies.

"The rally today has been ignited mainly by the better US data overnight," Mr Waterer said.

"There's also better sentiment, with things looking a bit rosier in Europe."

He said improved commodity prices gold and oil made significant gains had helped boost the materials sector, which led the market higher.

In the resource sector, BHP Billiton rose 67? to $32.47 and Rio Tinto was $1.55 higher at $58.97.

Origin Energy was 42? richer at $12.75 after it was announced that a massive $23 billion gas project in Queensland, in which Origin is a joint-venture partner, would be expanded.

Queensland's Linc Energy edged up 1? to 78?. Linc has axed 60 jobs as it aims to achieve a cash profit of $15 million in 2012-13.

Among the big banks, ANZ finished 11? higher at $22.37, National Australia Bank improved 15? to $23.83 and Commonwealth rose 27? to $53.59 but Westpac eased 2? to $21.53.

Virgin Australia was steady at 37.5?. The airline carried more domestic passengers than rival Qantas over the year to May 31 a first for the industry's traditional No. 2.

Casinos operator Echo Entertainment was 3? higher at $4.33 as the jockeying for position by stakeholders continued, with James Packer's Crown Ltd seeking regulatory approval to lift its stake in Echo to 25 per cent.

At the close of Sydney trade, the spot gold price was up $US11.18 at $US1617.15.

Turnover was 1.39 billion securities worth $3.51 billion, with 679 stocks up, 229 down and 325 unchanged. AAP

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

Why did the S&P/ASX 200 index rally and what drove the market higher?

The S&P/ASX 200 climbed 45 points (about 1.1%) to 4172.2 as investors reacted to better-than-expected US data (factory orders were up 0.7% in May) and a rosier outlook for the eurozone. Improved sentiment and firmer commodity prices, especially in gold and oil, helped push the market up, with the materials sector leading gains.

Which sectors led the gains on the ASX and why should everyday investors care?

The materials sector led the advance, supported by stronger commodity prices such as gold and oil. Everyday investors should watch materials and commodity-linked stocks because moves in global demand and commodity prices can quickly affect earnings and share prices in that sector.

How did major mining companies perform in the rally?

Major miners did well: BHP Billiton rose to $32.47 and Rio Tinto was $1.55 higher at $58.97. These gains reflect the broader lift in the resources sector as commodity prices improved.

What news affected Origin Energy’s share price and what does it mean for investors?

Origin Energy rose to $12.75 after the announcement that a massive $23 billion gas project in Queensland — in which Origin is a joint-venture partner — would be expanded. For investors, project expansion can signal future revenue and production growth for participating energy companies.

How did the big Australian banks move and what should investors note?

ANZ finished higher at $22.37, National Australia Bank improved to $23.83, and Commonwealth Bank rose to $53.59, while Westpac eased to $21.53. Investors should note that bank share movements often track broader market sentiment and economic indicators, so divergences between the majors can be meaningful for portfolio allocation.

What happened with Virgin Australia and how did it compare to Qantas?

Virgin Australia was steady and, notably, carried more domestic passengers than rival Qantas over the year to May 31 — a first for the industry’s traditional No. 2 carrier. That operational milestone can be important for airline market share and competitive dynamics.

What was the latest on Echo Entertainment and Crown Ltd’s stake situation?

Echo Entertainment was up at $4.33 amid ongoing jockeying for position, with James Packer’s Crown Ltd seeking regulatory approval to lift its stake in Echo to 25%. Takeover activity or stake moves like this can create short-term share price volatility.

What were the market-wide trading stats and the gold price on the day of the report?

At the close of Sydney trade the spot gold price was up US$11.18 at US$1617.15. Market turnover was 1.39 billion securities worth $3.51 billion, with 679 stocks up, 229 down and 325 unchanged — showing broad participation in the rally.