US gains put life into Australian stocks

THE sharemarket ended the week on a high note after a mildly positive lead from Wall Street, with financial and mining stocks driving gains.

By InvestSMART · 25 Feb 2012

By InvestSMART ·
25 Feb 2012

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THE sharemarket ended the week on a high note after a mildly positive lead from Wall Street, with financial and mining stocks driving gains.

The S&P/ASX 200 Index broke through the 4300-point resistance level for the first time since early December, closing up 20.6 points, or 0.48 per cent, at 4306.8.

CommSec market analyst Juliette Saly said it was encouraging to see the market gain strength towards the close of the session.

European markets were subdued on Thursday, but Wall Street gained ground after jobless claims data signalled that the US labour market was getting back on its feet, Ms Saly said.

"That's given a little bit of positive sentiment to the market and also suggests that Wall Street is going to open higher again tonight," she said. "We've certainly seen good support coming through for financial and mining stocks today."

NAB was the strongest performer of the big four banks, gaining 31?, or 1.3 per cent, to $23.52. ANZ found 13? to $22.20, Westpac put on 12? to $20.78 and Commonwealth was up 18? at $49.70.

BHP Billiton was up 31? at $36.54 while Rio Tinto rose 58? to $68.09.

Goldminer Newcrest was weaker after saying plant reliability problems at its Lihir mine in Papua New Guinea were expected to shave March-quarter production by up to 60,000 ounces. The shares slid $1.55, or 4.3 per cent, to $34.55.

Ms Saly said casino operator Crown looked good in early trade after delivering a solid interim result, but weakened in the afternoon after James Packer said he was aiming to take Crown's holding in smaller peer Echo Entertainment above 10 per cent. Crown finished down 13? at $8.30. Echo surged 50?, or 13.2 per cent, to $4.30.

Ms Saly said energy provider AGL missed market expectations with a 51.2 per cent fall in first-half net profit to $117 million. The stock gave up 67?, or 4.7 per cent, to $13.67.

The retail sector performed well, with David Jones gaining 10?, or

3.9 per cent, to $2.65, and Kathmandu rose 4.5?, or 3 per cent, to $1.53.

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Frequently Asked Questions about this Article…

Why did the ASX 200 finish higher and break the 4300 resistance level today?

The S&P/ASX 200 closed at 4,306.8, up 20.6 points (0.48%), after a mildly positive lead from Wall Street. Positive US jobless claims data gave markets some optimism and helped financial and mining stocks drive gains, with CommSec analyst Juliette Saly noting the market gained strength toward the close.

Which sectors drove the gains in Australian stocks and what does that mean for investors?

Financial and mining stocks were the main drivers of the rally, giving broad support to the market. The article also noted a good performance in the retail sector. For everyday investors, sector-led moves can indicate where market sentiment is strongest, but they also underscore the importance of watching sector-specific news.

How did the big four Australian banks perform in the session?

The big four banks all rose on the day. NAB was the strongest performer among them, trading at $23.52. ANZ was at $22.20, Westpac at $20.78 and the Commonwealth Bank at $49.70 according to the report.

Which mining stocks stood out in the rally and what were their prices?

Major miners showed strong gains. BHP Billiton traded around $36.54 and Rio Tinto rose to about $68.09, making them clear contributors to the market's upside.

What happened at Newcrest and how did the market react?

Newcrest warned that plant reliability problems at its Lihir mine in Papua New Guinea could reduce March‑quarter production by up to 60,000 ounces. The stock fell by $1.55, or about 4.3%, to $34.55 on the news.

Why did Crown shares weaken while Echo Entertainment surged?

Crown initially looked strong after delivering a solid interim result but weakened after James Packer said he was aiming to increase Crown's holding in smaller peer Echo Entertainment above 10%. The day’s trading saw Crown finish lower at $8.30 while Echo jumped to $4.30.

What did energy provider AGL report and how did investors respond?

AGL reported a 51.2% fall in first‑half net profit to $117 million, missing market expectations. The stock fell on the news, closing around $13.67.

How did retail stocks perform and which retailers moved higher?

The retail sector performed well in the session. David Jones rose to about $2.65 and Kathmandu increased to roughly $1.53, reflecting broader positive sentiment in consumer-exposed names.