Surprise jobs rise helps boost confidence
The sharemarket closed higher yesterday after an unexpected increase in employment left economists scratching their heads.
The sharemarket closed higher yesterday after an unexpected increase in employment left economists scratching their heads.The positive news helped investors shrug off concerns about Europe's financial system, despite financial stocks weighing heavily on the local bourse.The benchmark S&P/ASX200 index rose 20.5 points, or 0.48 per cent, to 4295.6, while the broader All Ordinaries index rose 21.6 points, or 0.5 per cent, to 4353.8.Economists thought another rate cut was likely next month after the Reserve Bank surprised everyone a week ago by cutting the cash rate by 0.5 percentage points.But things became slightly less certain after data showed 15,500 new jobs were created in April, far more than the predicted 5000-job contraction. That meant Australia's monthly jobless rate unexpectedly dropped to 4.9 per cent, when economists had expected it to rise to 5.3 per cent."The good jobs and other reports means [the Reserve Bank] can comfortably sit on their hands in June, having got ahead of the curve in May with a 50 basis point cut," the chief economist at NAB, Rob Henderson, said.The news helped investors ignore worrying signs in Europe, where Spain's stockmarket hit an 8? year low overnight on concerns its banks were under-funded.Among Australia's major banks, ANZ shares fell 97?, to $22.15, after the stock went ex-dividend.National Australia Bank fell 4? to $24.57, despite its six-month profit rising to a record $2.83 billion. Analysts suggested NAB's results showed its core banking business was under pressure. Commonwealth Bank rose 24? to $51.90, and Westpac rose 6? to $22.90.In the resources sector, global miner BHP Billiton was 29? higher at $34.62. Rio Tinto was up 71? at $61.94 as its chairman told shareholders that he was more confident about the global economic picture than he was six months ago.Among other stocks, News Corporation rose 89? to $20.16, and its non-voting stock rose 93? to $19.96 after third-quarter net profit rose 47 per cent. However, News said conditions would be tough for its Australian and British newspapers due to soft advertising markets.Singapore Telecom was steady at $2.53 as its Optus business said net profit for fiscal 2012 had risen 1.5 per cent to $787 million despite intense competition.Fuel supplier Caltex Australia fell 1? to $13.39 as it said an ongoing review of the future of its loss-making refineries was focusing on the Kurnell refinery in Sydney.Construction giant Leighton was up 17? at $19.35 after it was awarded $800 million in gas and water infrastructure contracts in Queensland.On Wall Street on Wednesday, the Dow Jones fell 97.03 points, or 0.75 per cent, to 12,835.06 points.