THE Australian market moved up strongly yesterday as investors focused on Italy and a rise in commodity prices.
The S&P/ASX 200 Index climbed 52.3 points, or
1.22 per cent, to 4346.1. The benchmark has climbed 174.3 points in the past four sessions and has now recovered all but 2 points of the ground lost in a week-long tumble from its close on October 27 at 4348.2.
The materials sector led gains after further advances on Wall Street and stronger metals prices overnight.
US stocks rose on news that Italian Prime Minister Silvio Berlusconi would resign once a new budget was passed. Italy has become a key focus for markets this week, with Mr Berlusconi seen as an obstacle to sweeping economic reforms needed to help the country cut its debt load and avoid sinking into a debt crisis.
IG Markets analyst Stan Shamu said Australian stocks had opened strongly, in line with Wall Street.
"Reports suggest Silvio Berlusconi is on his way out and markets seem to have taken kindly to that news," Mr Shamu said.
The general theme of risk taking had continued, with the materials sector rising
1.7 per cent, he said.
BHP Billiton shares put on 58?, or 1.5 per cent, to $38.33 and Rio Tinto rose 98? to $70.75.
Fortescue Metals moved up 8?, or 1.6 per cent, to $5.10. An Aboriginal corporation has been denied the opportunity to speak at Fortescue Metals Group's annual meeting.
Myer was among the day's best performers as the consumer discretionary sector posted solid gains. It jumped 15?, or 6.4 per cent, to $2.48 after the company reiterated its guidance for flat sales for the full financial year but reported early signs that Christmas spending would be better than expected.
Other retailers were also higher, with David Jones up 15? at $3.29 and Harvey Norman 7? higher at $2.19.
Seven Group Holdings rose 20?, or 2.6 per cent, to $7.78 after the resources and media company said it expected its first-half profit to be higher than for the same period last year.
Goldminer Newcrest jumped 81?, or 2.3 per cent, to $36.87. At the close of Australian trade, the spot gold price was down $US4.39 at $US1788.24 an ounce.
The dollar closed higher as the looming resignation of Italy's prime minister improved investor sentiment. However, gains from the overnight session overseas were given back in Australian trading as the currency failed to break through the $US1.04. At the close it was at $US1.0362, up from Tuesday's $US1.0307.
Frequently Asked Questions about this Article…
What happened to the Australian market yesterday and how did the ASX 200 perform?
The Australian market moved up strongly — the S&P/ASX 200 climbed 52.3 points (about 1.22%) to 4,346.1. The benchmark has recovered most of the ground lost in a recent slide, rising 174.3 points over the past four sessions.
Why did the materials sector lead gains on the ASX and what role did commodity prices play?
The materials sector led gains as stronger metals and commodity prices overnight boosted miner stocks. Advances on Wall Street and a general theme of risk-taking also pushed demand for materials names, helping the sector rise about 1.7%.
Which major miners moved noticeably and what were their share price changes?
Major miners that rose included BHP Billiton (up about 1.5% to $38.33), Rio Tinto (rose to $70.75) and Fortescue Metals (up to $5.10, around 1.6%). These moves reflected the stronger metals market and broader risk-on sentiment.
Why did Myer shares jump and what does that mean for retail investors?
Myer jumped after it reiterated guidance for flat full-year sales and reported early signs that Christmas spending could be better than expected — the stock rose about 6.4% to $2.48. For everyday investors, the reaction shows how sales guidance and seasonal spending signals can drive retail share prices.
How did other retailers perform, such as David Jones and Harvey Norman?
Other retailers were also higher on the day: David Jones rose to $3.29 and Harvey Norman increased to $2.19. The broader consumer discretionary sector posted solid gains alongside Myer.
What happened with gold and goldminer Newcrest during the session?
Goldminer Newcrest jumped about 2.3% to $36.87. At the same time, the spot gold price was slightly lower in US trading, down US$4.39 to US$1,788.24 an ounce, showing a divergence between the bullion price and some mining stocks.
How did political developments in Italy influence investor sentiment and markets?
News that Italian Prime Minister Silvio Berlusconi would resign once a new budget was passed lifted investor sentiment — US stocks rose on the news and Australian markets opened strongly. IG Markets analyst Stan Shamu said reports of Berlusconi ‘on his way out’ were taken kindly by markets, supporting risk-taking.
What happened to the Australian dollar and what should investors be aware of?
The Australian dollar closed higher at US$1.0362, up from US$1.0307, but it failed to break above the US$1.04 level. The article noted that some overnight gains were given back in local trading, highlighting that currency moves can be volatile and react to both global headlines and domestic sessions.
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