THE stockmarket rose the most in almost three years yesterday as investor sentiment improved on renewed optimism of a solution in the European debt crisis.
The bourse opened stronger after Wall Street surged for its second straight day, eased slightly after midday, then soared in the last hour of trading. By the close, the benchmark S&P/ASX200 index was up 143.4 points, or 3.65 per cent, at to 4069.9, while the broader All Ordinaries rose up 139.6 points, or 3.5 per cent, at 4132.1.
The Intersuisse director of equities, Andrew Sekely, said the market had taken a lead from positive sentiment about the euro zone debt crisis on Wall Street overnight.
"It's a follow-through [from] two good days in the US," he said. "Investors are hoping that ... the measures that hopefully will be taken [in Europe] will continue to drive the market higher."
There were gains across the board, with all sectors closing higher.
The materials sector, which was among those sectors hardest hit by declines in recent weeks, ended the day up 4.3 per cent.
But Mr Sekely said stocks were still a long way from recovering all of the recent heavy losses on the back of weak commodity prices, particularly over the past fortnight.
Among the mining stocks, BHP Billiton advanced 3.3 per cent, or $1.17, to $36.30, while fellow miner Rio Tinto gained 4.9 per cent, or $2.98, to $63.28. Atlas Iron climbed 20?, or 7.1 per cent, to $3, while Fortescue Metals gained 30?, or 7.1 per cent, to $4.55.
There was also solid support for financials, with all the major retail banks gaining more than 4 per cent. National Australia Bank was the strongest stock on the ASX 20, soaring 5 per cent, or $1.09, to $22.87.
Energy stocks also finished sharply firmer as crude oil prices rallied after a significant, unexpected drop in US oil stockpiles.
Woodside Petroleum ended 4.7 per cent, or $1.54 higher, at $34.34, while Santos closed 24?, or 2.1 per cent, stronger at $11.60.
Uranium miner Paladin Energy was the best performing stock on the S&P/ASX100 index, soaring 16.2 per cent, or 19?, to $1.36.
Mr Sekely said volumes were better than they had been in recent days.
Frequently Asked Questions about this Article…
What caused the ASX rally and how did the S&P/ASX200 and All Ordinaries perform?
The market surged on renewed optimism about a solution to the European debt crisis and follow-through from gains on Wall Street. The S&P/ASX200 jumped 143.4 points (3.65%) to 4,069.9, while the All Ordinaries rose 139.6 points (3.5%) to 4,132.1.
Which sectors led the gains during the stockmarket rally?
All sectors closed higher, with the materials sector notably strong—up about 4.3%. Financials and energy stocks also finished sharply firmer, contributing to the broad-based ASX rally.
How did major mining stocks perform in the rally?
Mining stocks saw solid gains: BHP Billiton rose about 3.3% to $36.30, Rio Tinto gained around 4.9% to $63.28, Atlas Iron climbed roughly 7.1%, and Fortescue Metals jumped about 7.1% to $4.55, reflecting renewed buying in the materials/mining space.
What happened with Australia's big banks during the market lift?
All the major retail banks gained more than 4% during the session. National Australia Bank was the standout on the ASX20, soaring about 5% to $22.87.
Did a move in oil prices help lift energy stocks on the ASX?
Yes. Crude oil rallied after an unexpected drop in US oil stockpiles, which supported energy names. Woodside Petroleum rose about 4.7% to $34.34 and Santos was around 2.1% stronger at $11.60.
Which stock was the top performer on the S&P/ASX100 during the rally?
Uranium miner Paladin Energy was the best performing stock on the S&P/ASX100, soaring about 16.2% to $1.36 during the session.
Does this one-day rally mean the market has fully recovered from recent losses?
No. While the rally was the biggest in nearly three years and reflected improved sentiment, the market was still a long way from recovering all recent heavy losses—especially given weak commodity prices over the prior fortnight.
Were trading volumes higher during the rally and why does that matter for everyday investors?
Yes—trading volumes were better than in recent days, indicating stronger market participation during the upswing. For everyday investors, higher volumes can signal increased investor interest behind a move, though it doesn't guarantee future performance.
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