The share market has closed more than two per cent higher after Australia’s biggest bank and the country’s central bank gave upbeat assessments on the national economy.
This follows a series of recent market declines, including Monday’s steep falls in the wake of the deadly terrorists attacks in Paris.
Strong leads from overseas markets combined with positive local economic appraisals from the Commonwealth Bank and the Reserve Bank helped drive all sectors higher, Phillip Capital senior client adviser Michael Heffernan said.
“When the market opened we rose on strong market performances from Europe and the US overnight,” he said.
“Then the commentary from the CBA during morning trade was upbeat followed by the Reserve Bank’s minutes which reinforced this positive view.”
Commonwealth Bank chairman David Turner told the group’s annual general meeting on Tuesday that the weaker Australian dollar and historically low interest rates were helping the economy evolve in the wake of the country’s mining boom.
The Reserve Bank’s minutes from its November board meeting said it was holding off from cutting the cash rate because it was confident the local economy was benefiting from a lower Australian dollar.
Leading the gains were the the big four banks.
Commonwealth Bank shares rose $2.29, or three per cent, to $77.07, Westpac advanced 58 cents, or 1.93 per cent, to $30.60, National Australian Bank lifted 64 cents, or 2.3 per cent, to $28.50 and ANZ rose 58 cents, or 2.24 per cent, to $26.49.
Among the miners, BHP Billiton was up 27 cents, or 1.34 per cent, to $20.37, while Rio Tinto added 69 cents, or 1.46 per cent, to $48.10.
Meanwhile, Qantas gained 21 cents, or nearly six per cent, to $3.76 after it finally shed its junk credit rating from Standard & Poor’s.
KEY FACTS
* At the close on Tuesday, the benchmark S&P/ASX200 index was up 114.4 points, or 2.29 per cent, at 5,118.2 points.
* The broader All Ordinaries index was up 109.8 points, or 2.17 per cent, at 5,174.3 points.
* The December share price index futures contract was up 129 points at 5123 points, with 40,493 contracts traded
* The price of gold in Sydney at 1700 AEDT was $US1078.40 per fine ounce, down $17.05 on Monday’s price of $US1095.45.
* The national turnover was 1.9 billion securities worth $4.6 billion.
