Stocks up strongly on hopes for euro plan
THE sharemarket gained about $35 billion in value yesterday as buyers returned amid hopes of a comprehensive fiscal stability plan for Europe.
THE sharemarket gained about $35 billion in value yesterday as buyers returned amid hopes of a comprehensive fiscal stability plan for Europe.The S&P/ASX 200 Index climbed 113.1 points, or2.73 per cent, to 4255 more than winning back the 63.7 points lost last week.Global markets surged on optimism that a meeting of European leaders this week would thrash out a plan for the euro zone's economic woes. Yesterday's Australian market performance was roughly in line with Friday night's gains on Wall Street, which also was responding to some strong earnings reports.EU leaders on Sunday agreed to plans to increase the firepower of the euro-zone rescue fund the European Financial Stability Facility and backed plans to recapitalise banks that would be hit by a massive write-down of Greek debt.They also pressed Italy to slash its debt mountain, and ruled out tapping the European Central Bank's balance sheet to contribute to the rescue fund.CommSec market analyst Juliette Saly said gains were across the board but strong Chinese manufacturing data added momentum to mining stocks, as did comments from Rio Tinto chief executive Tom Albanese that long-term demand for commodities remained strong.Rio advanced $3.06, or4.9 per cent, to $65.63, BHP Billiton closed up $1.15, or 3.2 per cent, at $36.85 and Fortescue Metals jumped 36?, or 8.5 per cent, to $4.61.Caltex was also a strong performer, up 77?, or 5.8 per cent, at $13.98.Drug developer Pharmaxis, which is a step closer to marketing a new treatment for cystic fibrosis in Europe, soared 47?, or50 per cent, to $1.41.In the energy sector, Woodside Petroleum put on $1.21, or 3.6 per cent, to $34.59 and Santos was 42?, or 3.47 per cent, higher at $12.54.The big four banks were all more than 2 per cent stronger. ANZ climbed 50? to $21.71, NAB 62? to $24.94, Commonwealth $1.23 to $48.78 and Westpac 66? to $22.16.Shares in Origin Energy rose 54?, or 3.8 per cent, to $14.59 after the company reaffirmed its forecast of a30 per cent rise in underlying profit this financial year and again defended its coal seam gas operations.The indications of a euro-zone rescue gave gold a fillip. At the Australian close, it was up $US24.37 an ounce at $US1653.55.The dollar hit a six-week high, buoyed by encouraging Chinese manufacturing data. At the 5pm cutoff, it was at $US1.0416, up more than US1.5? from Friday's close.