banks lead the asx to the second consecutive day of gains 2130802015

Australian stocks ended a second successive day with solid gains, on the back of overnight gains on Wall Street and signs that the Chinese government was taking fresh measures to boost its equity markets. The Australian share market has added AU$55 billion in value over the two-day rally as investors went bargain-hunting once the benchmark index slumped below the 5,000 level.

The S&P/ASX 200 headed higher right out of the gate and maintained its uptrend through the day. The big banks were the mainstay of the rally, though telecom, energy and miners also lent a hand.

A global bullish tide lifted all boats Wednesday, with the rally in Asian stocks being led by the benchmark Nikkei-225 index at the Tokyo Stock Exchange. The index lifted a stellar 7.71 per cent in its biggest one-day jump since the financial crisis, and was followed by the Shanghai Composite index, up 2.29 per cent, and the Hang Seng Index, which moved up 4.10 per cent.

Indices and sectors

The benchmark S&P/ASX 200 rose 105.9 points, or 2.0 per cent, and closed at 5,221.1, while the broader All Ordinaries index was up 103.4 points, or 2.0 per cent, at 5,236.9.

The sectors which gained included financials (+3.03 per cent), telecom (+1.96 per cent), energy (+1.57 per cent), consumer discretionary (+1.53 per cent), materials (+1.31 per cent) and information technology (+1.17 per cent). Utilities (-0.40 per cent) was the only sector to end in the red.

Stocks

The big banks led the bull charge on the ASX. National Australia Bank Ltd. (ASX:NAB) was up 3.54 per cent to AU$31.27, Westpac Banking Corp (ASX:WBC) surged 4.23 per cent to AU$31.81, Commonwealth Bank of Australia (ASX:CBA) shot up 3.44 per cent to AU$76.72 and Australia and New Zealand Banking Group (ASX:ANZ) was up 3.67 per cent to 28.54.

In telecom, Telstra Corporation Ltd (ASX:TLS) was up 1.94 per cent to AU$5.79, M2 Group Ltd (ASX:MTU) gained 1.86 per cent to AU$9.29 and TPG Telecom Ltd (ASX:TPM) surged 5.18 per cent to AU$9.95.

In energy, recently boosted by M&A activity, Woodside Petroleum Limited (ASX:WPL) was up 0.81 per cent to AU$29.90, Santos Ltd (ASX:STO) surged 5.90 per cent to AU$4.67, Beach Energy Ltd (ASX:BPT) gained 2.52 per cent to AU$0.61 and Origin Energy Ltd (ASX:ORG) jumped 2.98 per cent to AU$7.95. However, Oil Search Limited (ASX:OSH) lost 0.63 per cent to AU$7.85.

In mining, industry leader BHP Billiton Limited (ASX:BHP) fell 0.20 per cent to AU$24.65 on an ex-dividend basis but other stocks ended well in the black. Rio Tinto Limited (ASX:RIO) shot up 2.57 per cent to AU$51.51, Fortescue Metals Group Limited (ASX:FMG) vaulted 4.08 per cent to AU$2.04, BC Iron Limited (ASX:BCI) was up 4.17 per cent to AU$0.25 and Atlas Iron Limited (ASX:AGO) shot up 6.90 per cent to AU$0.03. There were fresh rumours that Fortescue was receiving interest for a stake in its operations.

Uranium producer Paladin Energy Ltd (ASX:PDN) was the top gainer on the S&P/ASX 200, gaining nearly 13 per cent to AU$0.220. In a drive to cut costs the company repurchased US$20 million (AU$28.63 million) of its outstanding US$274 million 6.00 per cent convertible bonds due 2017 at an average price of 90.2 per cent. The transaction will generate US$3.9 million in savings in the form of principal and coupon payments over the balance tenure of the bonds. Coal miner WHITEHAVEN COAL LIMITED (ASX:WHC) was the second biggest gainer on the S&P/ASX 200, up 7.92 per cent to AU$1.09.

In consumer retail, Woolworths Limited (ASX:WOW) rebounded 2.89 per cent to AU$25.32, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, moved up 0.90 per cent to AU$40.15,  Caltex Australia Limited (ASX:CTX) was up 0.88 per cent to AU$30.78, Myer Holdings Ltd (ASX:MYR) rose 1.65 per cent to AU$0.93 and Metcash Limited (ASX:MTS) jumped 0.94 per cent to AU$1.07.

Economic news, currency and market outlook

The Westpac-Melbourne Institute Consumer Sentiment Index fell by 5.6 per cent to 93.9 in September, down from 99.5 in August, as consumer confidence was hit hard by market volatility and the weak domestic currency. “This print on the Index now marks the 17th out of the last 19 months that the Index has been below 100,” Westpac chief economist Bill Evans said, as reported by The Australian.

Data from the Australian Bureau of Statistics showed that home loan approvals grew 0.3 per cent in July, somewhat lower than economists’ expectations of a rise of 0.8 per cent, and the growth of 4.4 per cent recorded in June. While loans to owner-occupiers fell 0.9 per cent, those to property investors were up 0.5 per cent.

On Wall Street Wednesday, stocks gave up early gains and ended, instead, near the lows of the session as investors again fretted about an interest rate hike. The Dow Jones Industrial Average tumbled 236 points, or 1.44 per cent to 16255. The S&P 500 slid 27 points, or 1.38 per cent to 1942, while the Nasdaq Composite declined 55 points, or 1.15 per cent to 4756.

The Australian dollar is trading softer because the global rally in stocks appeared to fizzle out in the US, according to the Business Spectator. At 06:30 am this morning (AEST) the Australian dollar was trading at 70.09 US cents, down from 70.49 US cents on Wednesday.

The Australian stock market is likely to open lower given that at 6.45 am (AEST) this morning the September ASX SPI200 Index (AP) Future contract was down 84 points at 5,231.