rate hike relief boosts the global markets and asx 2369342015
All sectors ended the session in the green.
The Australian share market rebounded sharply on Monday, fuelled by Wall Street’s rise on Friday, and bullish trends in global equity markets. Soft jobs data from the US has fanned hopes that the US Fed would delay its interest rate hike.
The mining, energy and banking sectors led from the front in a trading session marked by thinner volume due to holidays in some states.
Australian economic data on inflation, job ads and the services sector was mostly positive, and this helped boost investor sentiment.
Indices and sectors
The benchmark S&P/ASX 200 rose 98.5 points, or 1.9 per cent, and closed at 5,150.5, while the broader All Ordinaries index was up 94.9 points, or 1.8 per cent, at 5,184.1.
The gaining sectors included materials (+3.36 per cent), energy (+2.80 per cent), consumer discretionary (+2.17 per cent), utilities (+2.17 per cent), information technology (+1.95 per cent) and industrials (1.92 per cent). There were no losing sectors.
Stocks
In mining, BHP Billiton Limited (ASX:BHP) shot up 3.98 per cent to AU$23.50, Rio Tinto Limited (ASX:RIO) rose 2.22 per cent to AU$49.81, Fortescue Metals Group Limited (ASX:FMG) was up 1.36 per cent to AU$1.87 and Atlas Iron Limited (ASX:AGO) gained 3.45 per cent to AU$0.03. Gold miner Newcrest Mining Limited (ASX:NCM) jumped 9.09 per cent to AU$13.80 and was one of the top gainers on the S&P/ASX 200.
Energy stocks also flared higher. Woodside Petroleum Limited (ASX:WPL) was up 3.08 per cent to AU$30.45, Santos Ltd (ASX:STO) surged 5.73 per cent to AU$4.43, and Oil Search Limited (ASX:OSH) rose 1.52 per cent to AU$7.37. Liquefied Natural Gas Ltd (ASX:LNG) and Karoon Gas Australia Limited (ASX:KAR) jumped up 15.60 per cent and 9.17 per cent respectively, and figured among the top five gainers on the S&P/ASX 200.
The big banks all clocked gains above 1 per cent each. National Australia Bank Ltd. (ASX:NAB) was up 1.66 per cent to AU$30.60, Westpac Banking Corp (ASX:WBC) gained 1.18 per cent to AU$30.10, Commonwealth Bank of Australia (ASX:CBA) of Australia rose 1.32 per cent to AU$74.36 and Australia and New Zealand Banking Group (ASX:ANZ) was up 1.71 per cent to AU$27.39.
In consumer staples, all the counters reported smart gains. Woolworths Limited (ASX:WOW) was up 1.41 per cent to AU$25.88, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, was up 1.86 per cent to AU$40.00, Caltex Australia Limited (ASX:CTX) surged 2.45 per cent to AU$32.16, Myer Holdings Ltd (ASX:MYR) jumped 1.14 per cent to AU$0.89 and Metcash Limited (ASX:MTS) was up 2.25 per cent to AU$1.14.
Economic news, currency and market outlook
Inflation levels rose to their highest in nearly a year according to the TD Securities Melbourne Institute Inflation Gauge, which rose by 0.3 per cent in September, after a 0.1 per cent rise in August. On a year-on-year basis the gauge was up 1.9 per cent, the highest annual rate since November 2014, according to the ABC. "We are seeing price pressures being passed on from the lower Australian dollar, but of comfort, we have seen domestic inflation moderate," said Annette Beacher, TD Securities' chief Asia-Pacific macro strategist.
According to the Performance of Services Index by the Australian Industry Group, the country’s services sector expanded for the fourth successive month in September. The index moved up to 52.3, with local tourism, retail and other consumer services leading the way. The four-month stretch of growth was the best seen since March 2008. "This broadening of the sources of domestic growth is an encouraging sign of an economy responding favourably to the stimulus of low interest rates and the further fall in the Australian dollar," said Australian Industry Group chief executive Innes Willox.
Data from ANZ showed that job advertisements surged 3.9 per cent in September, on top of a 1.3 per cent jump in August. Internet jobs rose 13.7 per cent on a year-on-year basis. "The positive trend in job advertising is a sign the economy is, so far, adjusting relatively well to significant headwinds from falling commodity prices and mining investment," said ANZ chief economist Warren Hogan, as quoted by ABC.
The Reserve Bank of Australia is expected to keep the benchmark interest rates unchanged at its monetary policy meeting today.
On Wall Street Monday, stocks continued their upward trend led by expectations of a delay in an interest-rate hike by the US Fed, as well as a jump in oil prices that helped boost the energy sector. The Dow Jones Industrial Average rose 304.06 points, or 1.85 percent, to 16,776.43, the S&P 500 gained 35.69 points, or 1.83 percent, to 1,987.05 and the Nasdaq Composite added 73.49 points, or 1.56 percent, to 4,781.26.
The Australian dollar was trading higher this morning as global markets welcomed the possibility of a delay in the Fed’s interest rate hike following the soft US jobs data released Friday, according to the Business Spectator. At 07:00 am this morning (AEDT) the Australian dollar was trading at 70.84 US cents, up from 70.68 US cents on Monday.
