The Australian share market has closed higher led by strong gains from mining stocks, a bounce in the big four banks and better global risk appetite.
The benchmark S&P/ASX200 closed 0.38 per cent higher at 5,671.5 points on Wednesday.
Market analyst Ben Le Brun from optionsXpress said investors focused on growth stocks, in particular miners due to strong commodity prices, and the banks after strength in the financial sector on US markets overnight spilled over to Australia’s big four.
“Investors have gone for growth so a bit of risk sentiment has returned on the back of a record close in the US overnight,” Mr Le Brun said.
“The banks, which have been out of sorts in the past couple of weeks, were due for bit of a bounce while the ongoing strength in the commodity space has helped the miners and risk sentiment.”
He said the consumer price index had little impact on equities but it did drive the Australian dollar sharply lower because it increased expectations for further Reserve Bank rate cuts.
Inflation figures for the December quarter missed market expectations, with Australian Bureau of Statistics data showing it rose 0.5 per cent compared to forecasts of a 0.7 per cent rise.
The Aussie was trading around 75.90 US cents just before the inflation data was released at 1130 AEDT. Immediately following the release, the currency fell to around 75.48 US cents.
The local dollar was trading at 75.37 US cents at 1700 AEDT, down from 75.73 cents on Tuesday.
On the share market, the resources sector was also buoyed by Rio Tinto’s sale of its NSW energy coal assets and a solid quarterly production report from BHP Billiton.
Rio Tinto was up $2.47, or 3.8 per cent, at $67.23, and BHP Billiton had risen 88 cents, or 3.3 per cent, to $27.89.
As for the banks, ANZ rose 32 cents, or 1.1 per cent, to $29.47, Westpac added 12 cents, or 0.38 per cent, to $31.77, Commonwealth Bank firmed 46 cents, or 0.56 per cent, to $82.23, and National Australia Bank gained 22 cents, or 0.73 per cent, to $30.26.
The share market will be closed on Thursday for the Australia Day public holiday.
ON THE ASX:
* At 1615 AEDT on Wednesday, the benchmark S&P/ASX200 was up 21.4 points, or 0.38 per cent, to 5,671.5 points.
* The broader All Ordinaries index was up 19.7 points, or 0.35 per cent, at 5,726 points.
* The March SPI200 futures contract was up 20 points at 5,614 points, with 27,827 contracts traded.
* National turnover was 3.6 billion securities traded, worth $7.7 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 75.37 US cents, from 75.73 from Tuesday
* 85.63 Japanese yen, from 85.495
* 70.27 euro cents, from 70.42 cents
* 60.23 British pence, from 60.55 pence
* 104.16 New Zealand cents, from 104.74 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,203.50 per fine ounce, down 12.50 US cents from $US1,216.00 on Tuesday.
BOND SNAPSHOT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.838pct, up from 1.8355pct Tuesday
* CGS 4.25pct April 2026, 2.6707pct, up from 2.6382pct
SYDNEY FUTURES EXCHANGE prices at 1630 AEDT:
* March 2017 10-year bond futures contract at 97.240 (implying a yield of 2.76pct), from 97.275 (2.725pct) on Tuesday
* March 2017 3-year bond futures contract at 98.010 (1.99pct), from 98.000 (2.000pct) on Tuesday
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
