THE sharemarket finished on a positive note yesterday after Wall Street closed at its highest since the end of 2007.
Positive comments from US Federal Reserve chairman Ben Bernanke, including expectations that the unemployment rate would keep falling, helped Wall Street post its biggest gains of the year and the Dow Jones Industrial Average surge past the 13,000-mark.
Locally, the benchmark S&P/ASX 200 Index was up 39.6 points, or 0.93 per cent, at 4287.2.
It has briefly lifted above 4300 points in recent months but has always slipped back below that mark due to continuing concerns about the global economy.
The last time the index spent a sustained period above the milestone level was in August last year.
The local market pushed higher in line with overseas markets, Shaw Stockbroking senior dealer Jamie Spiteri, said. "You've got an equity market that's gaining a little bit more confidence but coming off a fairly subdued base in recent times."
Market analyst Michael Heffernan said the local market's performance was a little disappointing compared with that of its overseas counterparts.
Business and consumer confidence was downbeat, but the equity market
was upbeat and would do well this year because "it's been held back for so long", he said.
Most sectors made solid gains, with financials and major resource stocks trading more than 1 per cent higher.
BHP Billiton rose 46?, or 1.3 per cent, to $35.61, while rival Rio Tinto jumped 95?, or 1.5 per cent, to $65.30.
Woodside Petroleum lost 31? to $35.59 but Oil Search surged 15?, or 2.2 per cent, to $7.14 and Santos added 17?, or 1.2 per cent, to $14.57.
Commonwealth Bank led the big four banks higher, closing up 43?, or 0.9 per cent, at $48.80. QBE Insurance was a standout, jumping 41?, or 3.3 per cent, to $12.87, while Insurance Australia Group gained 7?, or 2.1 per cent, to $3.39.
"QBE's a stock that's been hit very hard the worst-performing top 20 stock in our market in recent years and they're coming off a low base," Mr Spiteri said.
An improved US economy was beneficial to QBE and Macquarie Group, he said. Shares in Macquarie advanced 56?, or 2.1 per cent, to $27.23.
Fortescue Metals Group said it would raise $US1 billion through a bond issue to fund its big expansion plans. Fortescue shares were up 6?, or 1 per cent, at $5.83. Gold closed in Sydney at $US1672.55 an ounce, down $US30.63.
National turnover reached 2.2 billion securities, worth $5 billion. AAP
Frequently Asked Questions about this Article…
What pushed the Australian sharemarket higher today and how did Wall Street influence it?
The local market rose after Wall Street closed at its highest level since the end of 2007. Positive comments from US Federal Reserve chairman Ben Bernanke and expectations of a falling unemployment rate helped US indices surge (the Dow pushed past the 13,000 mark), which in turn lifted sentiment in Australia. The S&P/ASX 200 climbed 39.6 points (0.93%) to 4,287.2 as investors gained a little more confidence.
Which sectors led gains on the ASX and what does that mean for everyday investors?
Financials and major resource stocks were among the strongest performers, trading more than 1% higher on the day. For everyday investors, that meant bank and big-miner share prices helped drive the broader market rally, reflecting improved risk appetite following stronger overseas markets.
How did major miners like BHP, Rio Tinto and Fortescue perform today?
BHP Billiton rose 1.3% to $35.61 and Rio Tinto jumped 1.5% to $65.30. Fortescue Metals Group added about 1% to $5.83 and said it will raise US$1 billion through a bond issue to fund its expansion plans.
What happened to energy stocks such as Woodside, Oil Search and Santos?
Woodside Petroleum fell to $35.59, while Oil Search surged 2.2% to $7.14 and Santos rose 1.2% to $14.57. The moves show mixed performance within the energy sector on the day.
How did the big banks and insurers trade during the rally?
Commonwealth Bank led the big four banks higher, closing up 0.9% at $48.80. Insurance stocks were notable gainers: QBE jumped 3.3% to $12.87 and Insurance Australia Group gained 2.1% to $3.39. Macquarie Group also advanced 2.1% to $27.23.
What did analysts say about the market’s outlook after today’s rise?
Analysts said the market is gaining a bit more confidence after a subdued period. Shaw Stockbroking’s Jamie Spiteri noted the equity market was improving, while Michael Heffernan described local performance as a little disappointing compared with overseas peers but suggested the market could do well this year after being held back for so long.
What were the trading volumes and overall market context reported?
National turnover reached 2.2 billion securities worth about $5 billion. The S&P/ASX 200 has briefly traded above 4,300 in recent months but has slipped back below that mark; the last sustained period above that milestone was in August of the previous year.
Did commodity prices move today, for example gold?
Yes. Gold closed in Sydney at US$1,672.55 an ounce, down US$30.63 on the day.
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