Stocks rebound as CPI shows check in inflation
THE sharemarket rebounded strongly to finish the day in positive territory after initially falling more than 1 per cent.
THE sharemarket rebounded strongly to finish the day in positive territory after initially falling more than 1 per cent.The benchmark S&P/ASX200 index closed up 14.6 points, or 0.35 per cent, at 4242.5, while the broader All Ordinaries gained 13.1 points, or 0.31 per cent, to 4300.8. National turnover was 1.67 billion shares worth $4.38 billion.The rebound came after the consumer price index (CPI) figure for the September quarter showed that inflation had slowed, prompting a turnaround in retail and banking stocks.IG Markets dealer Chris Weston said the market could hang onto its gains, despite concern about the European summit being held overnight. It was the news that a key meeting of European finance ministers had been cancelled ahead of the summit that drained confidence from US and European markets.Mr Weston said the market now fully expected a rate cut."The discretionary stocks are looking like they're seeing a bit of leeway," he said.The big four banks all closed higher after starting the day in the red. ANZ gained 4? to $21.59, National Australia Bank, which reports its full-year earnings tomorrow, rose 28? to $24.95, Westpac increased 30? to $22.30 and Commonwealth Bank gained 39? to close at $49.11.The major retailers also rose, with Woolworths up 11? at $24.15, David Jones up 12? at $3.36 and JB Hi-Fi lifting 70?, or 4.7 per cent, to $15.74.In the resources sector, goldminer Newcrest was up $1.15, or 3.5 per cent, at $34.40 after a rise in the gold price overnight. The spot price of gold in Sydney was $US1719.33 an ounce, up $US63.67.Some smaller goldminers made strong gains, with Intrepid Mines rising 10.5?, or 9.95 per cent, to $1.16. Perseus Mining rose 12? to $3.23 and Alacer Gold jumped 81?, or 7.8 per cent, to $11.19.BHP dropped 23? to $36.94 and Rio Tinto was up 11? at $66.74.Insurance Australia Group said it was on track to deliver on its full-year guidance after an encouraging performance in the first quarter. Its shares rose 4? to $3.16.The December share price index futures contract was up six points at 4222 with 36,448 contracts traded.