Jobs data icing on market's cake

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This was published 13 years ago

Jobs data icing on market's cake

Close The Australian sharemarket rallied today, posting its biggest gain in five weeks, boosted by strong overseas markets and encouraging local jobs numbers.

At the close, the benchmark S&P/ASX200 index was up 102.1 points, or 2.4 per cent, at 4356.7, while the broader All Ordinaries index gained 96.2 points, or 2.2 per cent, to 4374.

    Among major sub-indexes, financials rose 2.9 per cent, materials gained 2 per cent and energy shares added 2.1 per cent.

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    - Oil surges past $US75
    - Dow futures are 22 points lower at 9958

    The market made a good start out of the blocks today as optimism over the upcoming second quarter earnings season in the US lifted investor spirits. Strong local jobs data then added to the buoyant mood.

    Australia added almost 46,000 jobs in June, the most since January, underscoring the strength of local demand. The jobless rate fell to 5.1 per cent for the month - the lowest rate since January 2009. The news also sent the Australian dollar soaring about 0.8 US cents.

    CMC Markets’ senior dealer Matt Lewis said positive sentiment from a strong US lead, combined with short covering and profit taking boosted the market.

    ‘‘We also got a bit of a kick along from the strong jobs data,’’ he said.

    Mr Lewis said the share market has risen 4 per cent this week, but thin volumes showed institutions and foreign investors were still absent.

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    ‘‘The rally feels overdone,’’ he said. ‘‘The real money is not going to head in until we see some clarity from reporting season in the US.’’

    US listed companies will start reporting June quarter earnings next Monday, with Australian listed corporates reporting interim and full-year results from July 26.

    The market expects US companies to deliver a 34 per cent lift in earnings and positive outlook statements, Mr Lewis says.
    ‘‘If we don’t get super positive commentary then I think we’ll resume back to the sell-off.’’

    Banks jump

    Banks and financial stocks led the market, with Macquarie Group surging $2.27, or 6.25 per cent, to $38.58, and ANZ Banking Group jumping 91 cents, or 4.29 per cent, to $22.14.

    Westpac advanced 77 cents, or 3.62 per cent, to $22.02, National Australia Bank gained 67 cents, or 2.9 per cent, to $23.76, and Commonwealth Bank added $1.30, or 2.69 per cent, to $49.55.

    ‘‘The speculation has been that offshore funds have been shorting Aussie financials en masse just on concern over their exposure to the housing market,’’ Mr Lewis said.

    Resources and energy stocks made solid gains, with BHP Billiton advancing 73 cents, or 1.95 per cent, to $38.16 and Rio Tinto adding $1.21, or 1.84 per cent, to $67.05.

    Oil Search gained 10 cents, or 1.8 per cent, to $5.66, Woodside Petroleum put on 79 cents, or 1.91 per cent, to $42.09, while Santos jumped 31 cents, or 2.49 per cent, to $12.76.

    By 1628 AEST, the spot price of gold in Sydney was trading at $US1,206.50 per fine ounce, up $US17.25 from Wednesday’s closing price of $US1,189.25.

    Retailers enjoyed broad-based strength, with Harvey Norman the standout performer, up 20 cents, or 5.8 per cent, at $3.65.

    Harvey Norman on Thursday finalised its purchase of assets from troubled retailer Clive Peeters which is expected to add $300 million to $400 million to the retailer’s annual sales.

    Pacific Brands jumped 4.5 cents, or 5.33 per cent, to 89 cents, and JB Hi-Fi gained 80 cents, or 4.32 per cent, to $19.30.

    Major media stocks also marched into positive territory.

    Fairfax Media climbed five cents, or 3.79 per cent, to $1.37, while News Corporation added 34 cents, or 2.16 per cent, to $16.11 and its non-voting scrip firmed 21 cents, or 1.49 per cent, to $14.26.

    On the Sydney Futures Exchange, the September futures contract was 97 points higher at 4,344 points on turnover of 35,048 contracts.

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    more to come.

    AAP, with BusinessDay

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