Wall Street leads as stocks close higher

THE sharemarket closed firmer after a positive lead from Wall Street on encouraging comments by US politicians about avoiding the "fiscal cliff".

By InvestSMART · 30 Nov 2012

By InvestSMART ·
30 Nov 2012

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THE sharemarket closed firmer after a positive lead from Wall Street on encouraging comments by US politicians about avoiding the "fiscal cliff".

The benchmark S&P/ASX 200 Index was up 30.4 points, or 0.68 per cent, at 4477.7, while the broader All Ordinaries Index rose 27.5 points, or 0.62 per cent, to 4490.1.

RBS Morgans Ipswich manager Tony Russell said the market closed at its highest point of the day after gains by the big miners and banks.

Wall Street posted good gains, spurred by encouraging remarks from US President Barack Obama and House Speaker John Boehner on averting looming tax rises and spending cuts that could push the economy into recession, the so-called "fiscal cliff".

The Dow Jones Industrial Average finished 0.83 per cent higher at 12,985.11, snapping two days of losses. Locally, the big miners started the day mixed but all closed strongly. BHP Billiton closed 21? higher at $34.21, despite angry shareholders at its annual meeting accusing the company of hoarding $5 billion in surplus cash when it should be paying a special dividend.

Rio Tinto gained 48? to $57.18 after announcing plans to cut spending and make savings worth billions of dollars in the next few years. Iron ore miner Fortescue Metals added 6? to $3.86.

The four big banks also gained strength. ANZ finished 27? higher at $24.09, National Australia Bank gained 7? to $23.95, Westpac jumped 20? to $25.23 and Commonwealth Bank surged 46? to $59.44.

Australian Bureau of Statistics data released on Thursday showed Australia's mining investment boom might be peaking earlier than expected as resource companies rein in capital spending plans.

National turnover was 1.6 billion securities worth $4.11 billion.

The price of gold in Sydney closed at $US1719.62 an ounce, down $US19.86.

The dollar was trading higher at US104.67?, up from US104.48?.

Meanwhile, bond futures prices were little moved, despite a weaker capital investment outlook.

UBS interest rate strategist Matthew Johnson said bond futures edged higher following the release of capex figures that showed a downwards revision to spending plans for 2012-13.

Prices then dropped back but he said bond futures should be well supported overnight.

The December 10-year bond futures contract was at 96.86 (implying a yield of 3.14 per cent), down slightly from 96.865 (3.135 per cent). The three-year contract was trading at 97.33 (2.67 per cent), unchanged.

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Frequently Asked Questions about this Article…

Why did the Australian sharemarket close higher today?

The Australian sharemarket closed firmer after a positive lead from Wall Street — encouraging remarks from US political leaders about avoiding the "fiscal cliff" — and gains in big miners and major banks. The S&P/ASX 200 rose 30.4 points (to 4,477.7) and the All Ordinaries increased 27.5 points (to 4,490.1).

How did Wall Street's reaction to the "fiscal cliff" influence ASX stocks?

Wall Street posted solid gains after encouraging comments from US President Barack Obama and House Speaker John Boehner on averting the fiscal cliff, which helped lift investor sentiment globally. The Dow Jones Industrial Average closed 0.83% higher at 12,985.11, providing a positive lead for ASX stocks that day.

Which big miners drove gains on the ASX and what were their closing prices?

Big miners closed strongly: BHP Billiton closed at $34.21 (despite shareholder complaints about about $5 billion in surplus cash and calls for a special dividend), Rio Tinto finished at $57.18 after announcing plans to cut spending and make billions in savings, and iron ore miner Fortescue Metals closed at $3.86.

How did Australia's big four banks perform and what were their closing prices?

The big four banks strengthened on the day: ANZ closed at $24.09, National Australia Bank at $23.95, Westpac at $25.23 and Commonwealth Bank at $59.44, each finishing higher as bank stocks gained market support.

What did the ABS data say about Australia's mining investment and capex plans?

Australian Bureau of Statistics data indicated the country's mining investment boom might be peaking earlier than expected. The ABS said resource companies are reining in capital spending plans, pointing to a weaker capital investment outlook for 2012–13.

What happened to the gold price and the Australian dollar during the session?

Gold in Sydney closed at US$1,719.62 an ounce, down US$19.86. The Australian dollar was trading higher at US104.67¢, up from US104.48¢ earlier in the session.

How active was trading — what was the market turnover today?

Trading activity was substantial: national turnover was 1.6 billion securities with a total value of A$4.11 billion, reflecting solid market participation during the session.

What happened to bond futures and yields, and what did market strategists comment?

Bond futures were little moved overall. UBS interest rate strategist Matthew Johnson said futures initially edged higher after the capex figures showed a downward revision to spending plans for 2012–13, then eased back but should be well supported overnight. The December 10‑year bond futures contract stood at 96.86 (implying a yield of 3.14%), down slightly from 96.865 (3.135%), while the three‑year contract traded at 97.33 (2.67%), unchanged.