Stocks climb back after three-day plunge
AUSTRALIAN shares gained about $33 billion in value yesterday, with the market closing more than 2 per cent higher as positive local economic news raised investor spirits.
AUSTRALIAN shares gained about $33 billion in value yesterday, with the market closing more than 2 per cent higher as positive local economic news raised investor spirits.The S&P/ASX 200 Index closed up 107.9 points, or 2.65per cent, at 4183.4 winning back almost half the 232 points lost in the previous three sessions.The market climbed sharply at the open, bucking a slump on Wall Street on its first day's trading after the US Labor Day public holiday. It then drifted higher after the Australian Bureau of Statistics announced that the national economy had returned to growth.Gross domestic product rose 1.2 per cent in the June quarter, after the downturn in the previous quarter due to summer floods and cyclones."The GDP figures came in above economists' expectations, which were just lowered the other day after net exports came in, so it gave the market a bit of enthusiasm and we've held gains for most of the day, which is quite encouraging," said Ord Minnett research analyst Ron Cameron.The market was also experiencing "selling fatigue" after a few straight trading sessions in the red, he said."What you're seeing at the moment is that a lot of these dips in the market are opportunities to buy value and we've seen it happen quite a few times . . . the market can't stand it any longer and says 'there's too much value here, we've got to buy again'," he said.The financial and materials sectors led the pick-up, gaining 2.9 per cent and 2.8 per cent respectively.The big banks were higher, with National Australia Bank up 80? at $22.94.Westpac gained 57? to $20.07, Commonwealth put on $1.51 to $47.49 and ANZ rose 77? to $20.03.Among the miners, BHP Billiton was up $1.35 at $38.23 and Rio Tinto climbed $2.19 higher at $70.60.Atlas Iron was the best-performing stock, moving up 20?, or 5.7 per cent, to $3.74.Trading volumes were average as investors awaited firmer direction from US President Barack Obama's speech after the close of Thursday's trading on US markets.Making news in local trade, shares in investment bank Macquarie Group closed up 37? at $23.53 after it reduced its earnings guidance, saying it expected its first-half profit to decline from a year earlier due to difficult trading conditions and a higher tax rate.Gold continued its wild gyrations. At the Sydney close, the spot price was $US1838.75 an ounce, down $US67.88. On Tuesday afternoon, it hit a record $US1821.15 an ounce.