Steven Deare
(Australian Associated Press)
Australia’s share market recorded its best gain since August 4 as investors shrugged off confirmation of the first recession in almost 30 years.
The S&P/ASX200 benchmark index closed higher by 109.8 points, or 1.84 per cent, to 6063.2 points on Wednesday.
The All Ordinaries index finished higher by 108.6 points, or 1.77 per cent, to 6251.8.
The broad rally came despite figures showing the economy shrunk by 7.0 per cent for the June quarter.
Economists had tipped a 6.0 per cent drop.
The result seemed to have no effect on investors, while the Australian dollar dipped to 73.37 US cents then recovered.
The rousing ASX performance came after the ASX200 dropped 1.77 per cent on Tuesday, the day after reporting season ended.
Pepperstone chief market strategist Chris Weston could not quite explain the turnaround.
“Why we’ve had this magnitude of move is not immediately clear,” he said.
“You can’t always explain moves. I’ve been saying to clients, yesterday had all the hallmarks of a portfolio shift, and today people have used that weakness to buy,” he said.
The easing of the Aussie dollar and a drop in bond yields may have also lured investors back into the market, he said.
The materials sector gained 1.96 per cent and was one of the main contributors to the higher indices.
Miners had strong gains after the iron ore price (China port) rose 1.63 per cent to $US125.0.
BHP rose by 2.67 per cent to $38.50, Rio Tinto gained 1.55 per cent to $98.99, and Fortescue was up 2.27 per cent to $18.02. BlueScope Steel had a 5.62 per cent rise to $13.15.
There were gains of more than 2.0 per cent for industrials, consumer discretionaries, consumer staples, telecommunications, utilities and property.
Financials climbed 1.38 per cent. Among the big banks, ANZ rose 1.58 per cent to $18.05, the Commonwealth was up 1.23 per cent to $67.61, NAB was higher by 1.26 per cent to $17.62 while Westpac climbed 1.58 per cent to $17.32.
Shares in AMP finished higher by 4.87 per cent to $1.61 after it revealed unsolicited expressions of interest for its assets and businesses.
The AMP board will review the group to assess opportunities.
Financial technology provider iSignthis has increased its damages claim against the operator of the share market to $464.7 million.
iSignthis raised its claim in the Federal Court due to ASX Limited’s continued suspension of trading in the former’s shares since October last year.
The market operator is defending the proceedings. ASX shares finished higher by 2.9 per cent to $89.66, while shares in iSignthis last traded in October for $1.07 per share.
Items of interest on Thursday include construction and manufacturing data, as well as international trade figures.
The Australian dollar was buying 73.53 US cents at 1708 AEST, lower from 74.06 US cents at Tuesday’s close.
ON THE ASX
* The S&P/ASX200 benchmark index closed up 109.8 points, or 1.84 per cent, to 6063.2 points on Wednesday.
* The All Ordinaries index finished higher by 108.6 points, or 1.77 per cent, to 6251.8.
* At 1708 AEST, the SPI200 futures index was trading even at 6051 points.
CURRENCY SNAPSHOT
One Australian dollar buys:
* 73.53 US cents, from 73.91 US cents on Tuesday
* 77.97 Japanese yen, from 78.12 yen
* 61.86 Euro cents, from 61.76 cents
* 55.05 British pence, from 55.16 pence
* 108.75 NZ cents, from 109.39 cents
