Upbeat jobs data boosts share prices and dollar

THE sharemarket snapped a four-day losing streak as surprisingly good jobs figures added to investor confidence about the state of the economy.

By InvestSMART · 13 Apr 2012

By InvestSMART ·
13 Apr 2012

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THE sharemarket snapped a four-day losing streak as surprisingly good jobs figures added to investor confidence about the state of the economy.

The benchmark ASX 200 index posted its best day this month, closing at the day's high of 4280.6 points, a gain of 34.5 points, or 0.8 per cent. The All Ordinaries rose 34.4 points, or 0.8 per cent, to 4361.7.

The economy added 44,000 jobs last month, more than expected by analysts. The result prompted investors to buy the dollar, propelling it almost US1? higher to above $US1.04.

Comments by the new Ten Network chief James Warburton that the advertising market was showing signs of reduced volatility helped spark a rally among media stocks. Ten shares bounced off a three-year low to close 2? up at 78?. APN News & Media rose 4? to 87?, while Fairfax Media (publisher of the Herald) rose 2? to 74.5?.

The CMC Markets sales trader, Ben Taylor, said that while the positive jobs figures helped, many investors remained cautious. "Given the volatility and the lack of people trading at the moment, I think it's going to take quite a lot before you see mum-and-dad investors dipping their toes back in the water," he said.

Seven Group said it had bought the local arm of US mining parts and services business Bucyrus for $389 million. Seven-owned WesTrac, the Caterpillar heavy machinery dealer, will take on Bucyrus's business. Seven rose 53?, or 5.3 per cent, to $10.34.

BHP Billiton ended 31? higher at $33.90, while Rio Tinto added 94? to $64.46.

The banks all ended higher, with NAB up 28? at $24.58, Westpac 15? at $22.05, ANZ 21? at $22.98, and Commonwealth Bank up 16? at $49.76.

Toll road owner Macquarie Atlas rose 2? to $1.685 after it said it expected more European and American motorists to use its toll roads.

PanAust rose 16?, or 5.4 per cent, to $3.13, after reaffirming its 2012 production targets.

Shares in Flinders Mines were in a trading halt pending the outcome of court action aimed at preventing the iron ore explorer's $554 million takeover by a Russian steel maker. Flinders last traded at 22?.

MEO Australia rose 3.5? to 34? after the oil and gas explorer said it had received interest from prospective customers to buy methanol from its Timor Sea project.

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Frequently Asked Questions about this Article…

Why did the ASX 200 and All Ordinaries push higher in the latest session?

Surprisingly strong jobs data lifted investor confidence and helped snap a four-day losing streak. The ASX 200 closed at 4,280.6 points, up 34.5 points (about 0.8%), while the All Ordinaries rose by a similar 0.8% to 4,361.7.

How did the stronger-than-expected jobs report affect the Australian dollar and market sentiment?

The economy added about 44,000 jobs, beating expectations. That prompted investors to buy the Australian dollar, which rose almost one US cent to trade above US$1.04, and helped lift share prices as confidence in the economy improved.

Which media stocks rallied and what drove their gains?

Comments from the new Ten Network chief James Warburton suggesting reduced volatility in the advertising market sparked buying in media stocks. Ten shares bounced off a three-year low to close around 78 cents, APN News & Media rose to about 87 cents, and Fairfax Media climbed to roughly 74.5 cents.

What was the Seven Group acquisition and how did the market react?

Seven Group announced it bought the local arm of US mining-parts business Bucyrus for $389 million, with WesTrac (a Seven-owned Caterpillar dealer) taking on the business. The news pushed Seven shares higher — they rose about 5.3% to $10.34.

How did major mining stocks like BHP Billiton and Rio Tinto perform during the rally?

Major miners finished higher on the session. BHP Billiton rose about 31 cents to $33.90, while Rio Tinto added around 94 cents to close near $64.46.

Did the big Australian banks participate in the market lift?

Yes. The major banks all finished the day higher: NAB was up to $24.58 (about 28 cents higher), Westpac to $22.05 (about 15 cents), ANZ to $22.98 (about 21 cents) and Commonwealth Bank to $49.76 (about 16 cents).

Were there other corporate updates investors should note from the session?

A few companies had notable headlines: Macquarie Atlas said it expects more European and American motorists to use its toll roads and rose to about $1.685; PanAust reaffirmed its 2012 production targets and jumped to roughly $3.13 (about a 5.4% gain).

What happened with Flinders Mines and MEO Australia in the report?

Flinders Mines was placed in a trading halt pending the outcome of court action aimed at blocking a $554 million takeover by a Russian steelmaker; Flinders last traded at about 22 cents. MEO Australia rose to roughly 34 cents after saying it had received interest from prospective customers to buy methanol from its Timor Sea project.