the asx gains 0 2 per cent to scale a new seven year high 1027272015

Australian stocks opened with gains and the S&P/ASX 200 quickly touched the day’s high of 5,893.40 within minutes. However, concerted selling dragged the index down sharply into the red and it touched a low of 5,841.90 shortly after 11am. Bulls reappeared on the scene thereafter and pushed the index back to near its opening levels and safely into positive territory.

The volatile market action was marked by continuing bullish interest in the large banks which all ended in the black, while Commonwealth Bank of Australia (ASX:CBA) notched up another record closing. The smaller iron ore miners remained well supported as the prices of iron ore rallied, and the energy sector gained from the surge in crude oil prices. “If you’ve got resources going well and the banks going well, the whole market is going to take off, and I think that has been happening in the last couple of weeks,” said Michael Heffernan, senior client adviser at Phillip Capital, and quoted by The West Australian.

Overseas investors ploughed money into the Australian stock market eyeing further interest-rate cuts and the resulting gains in equities, though the uncertain fallout from the Greek debt drama, and poor Chinese economic data were worrisome factors.

“Central banks around Europe and Asia are now providing a repeat of the type of excess liquidity and low interest rates that came out of the United States and pushed equity markets higher over the past few years,” observed Prime Value portfolio manager S.T. Wong while speaking to The Sydney Morning Herald.

Indices and sectors

The benchmark S&P/ASX 200 rose 11.2 points, or 0.2 per cent, and closed the week at 5,888.7, while the broader All Ordinaries index jumped 14 points, or 0.2 per cent, to 5,849.5.

The top gaining sectors were information technology (+1.02 per cent), energy (+0.91 per cent) and materials (+0.51 per cent). The losers were real estate investment trusts (-1.74 per cent), utilities (-0.87 per cent) and consumer discretionary (-0.18 per cent).

Stocks

Amongst the miners, which traded mixed, BHP Billiton Ltd (ASX:BHP) gained 1.21 per cent to AU$32.56, Rio Tinto Ltd (ASX:RIO) fell 0.38 per cent to AU$63.55 and Fortescue Metals Group Ltd (ASX:FMG) shot up 3.47 per cent to AU$2.68. Atlas Iron Ltd (ASX:AGO) jumped 7.69 per cent to AU$0.210, Mount Gibson Iron Ltd (ASX:MGX) gained 6.67 per cent to AU$0.240 and BC Iron Ltd (ASX:BCI) was up 0.85 per cent to AU$0.590.

Amongst the largest banks, which all closed with gains, Commonwealth Bank of Australia (ASX:CBA) rose 0.34 per cent to AU$93.47, Westpac Banking Corp (ASX:WBC) gained 0.32 per cent to AU$37.65, National Australia Bank Ltd (ASX:NAB) was up 0.05 per cent to AU$37.50 and Australia and New Zealand Banking Group (ASX:ANZ) gained 0.36 per cent AU$35.87. ANZ announced that Mark Whelan will replace Phillip Chronican as the chief executive of its Australian business, and that Chronican, who joined ANZ as its Australia CEO in November 2009 from rival Westpac Banking Corp, will leave to pursue a "non-executive career," the bank said in a statement, according to Asia First.

Amongst energy stocks, Woodside Petroleum Ltd (ASX:WPL) lost 0.06 per cent to AU$35.17, but most others ended positively. Oil Search Ltd (ASX:OSH) was up 0.60 per cent to AU$8.35, Santos Ltd (ASX:STO) gained 1.18 per cent to AU$8.07, and Worleyparsons Ltd (ASX:WOR) shot up 10.23 per cent to AU$11.53, becoming the top gainer on the S&P/ASX 200. Senex Energy Ltd (ASX:SXY) was up 8.45 per cent to AU$0.385 and was the fourth biggest gainer on the S&P/ASX 200.

Domino's Pizza Enterprises Ltd (ASX:DMP) kept up its upwards momentum and gained 4.64 per cent to AU$35.89, Telstra Corporation Ltd (ASX:TLS) fell 0.15 per cent to AU$6.58 and Qantas Airways Ltd (ASX:QAN) was down 1.12 per cent to AU$2.64.

Economic news, currency and insight

Data from the Australian Bureau of Statistics showed that sales of new motorcars in Australia fell a seasonally adjusted 1.5 per cent in January to 93,104 vehicles from 94,501 in December. On a year-on-year basis, new car sales were up 0.2 per cent after having fallen 1.1 per cent in December.

The US markets were closed Monday for the Presidents’ Day holiday.

GDP data out of Japan showed that the country had emerged from recession, though the rate of growth did not meet market expectations. The Nikkei share index nevertheless rose to a nearly eight-year high.

The Reserve Bank of Australia will release the minutes of its February monetary policy meeting at 11:30 this morning (AEDT). "I think the RBA on Tuesday will be largely ignored by the markets," said James Rosenberg, senior private client adviser for Macquarie Private Wealth and quoted by the Business Spectator. "There’s not going to be too much change there, especially after the RBA's Statement on Monetary Policy earlier this month." The minutes will, nevertheless, be examined closely by the markets for clues to the RBA’s thinking on further rate cuts.

The Greek debt talks have broken down. Greece called the opening European bailout offer "absurd" and "unacceptable", after it had been told to respect the existing conditions of the bailout, according to AAP. The development pressured the Australian dollar which traded at 77.72 US cents at 07:00 this morning (AEDT), down from 77.84 cents on Monday.