Share market lifts 1pct in broad rally

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Gains have been made in nearly all sectors of the share market as it rose by more than one per cent, following signals from the US Federal Reserve that it will gradually tighten interest rates.

The benchmark S&P/ASX200 index rose 1.1 per cent to 5,736.8 points, and the Australian dollar was also well supported, surpassing 77 US cents to its highest level since March.

Wall Street’s Dow Jones Industrial Average closed at a record high following US Federal Reserve Chair Janet Yellen’s congressional testimony.

Investors interpreted Yellen’s speech as meaning that the central bank will gradually tighten policy and gradually unwind its huge asset portfolio.

Atlantic Pacific Securities client adviser Gary Huxtable said the move on US markets overnight had been one of the most positive seen recently, and Australian investors followed the sentiment.

The reasons behind the lift in the local bourse were twofold, he said.

“One is our market was naturally at the bottom of its recent range, so it’s been identified as an area of value,” Mr Huxtable said.

“The second was Yellen’s comments regarding the gradual increase in interest rates and also discussing the normalisation of the balance sheet.”

Healthcare stocks led the gains, with blood products and vaccines maker CSL jumping 2.8 per cent to $132.76.

Hearing implant supplier Cochlear lifted 2.4 per cent to $153.50 as it said it is spending $50 million on a manufacturing facility in China.

Among the big four banks, Westpac added 1.9 per cent, ANZ rose 0.6 per cent and Commonwealth Bank and National Australia Bank each found 0.5 per cent.

BHP BIlliton improved 0.5 per cent while Rio Tinto and Fortescue Metals both dipped 0.4 per cent.

Whitehaven Coal rose 1.7 per cent to $2.92, bouncing back from a fall of more than two per cent during morning trade after its annual production fell just short of its guidance.

ON THE ASX:

* The benchmark S&P/ASX200 was up 63 points, or 1.11 per cent, at 5,736.8 points.

* The broader All Ordinaries index was up 61.4 points, or 1.07 per cent, at 5,779.1 points.

* The September SPI200 futures contract was up 67 points, or 1.19 per cent, at 5,692 points.

* National turnover was 2 billion securities traded worth $5.9 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

CURRENCY ASK BID PREVIOUS

AUD/USD 0.7712 0.7711 0.7675

AUD/JPY 87.28 87.2 86.83

AUD/EUR 0.6739 0.6733 0.6724

AUD/NZD 1.0579 1.0568 1.057

AUD/GBP 0.5962 0.5957 0.5955

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,223.24 per fine ounce, from $US1,218.03 per fine ounce on Wednesday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.8932pct, from 1.930pct

* CGS 4.75pct April 2027, 2.6306pct, from 2.6660pct

Sydney Futures Exchange prices:

* September 2017 10-year bond futures contract at 97.315 (implying a yield of 2.685pct), from 97.28 (2.72pct) on Wednesday

* September 2017 3-year bond futures contract at 98.02 (1.98pct), from 97.97 (2.03pct).

(*Bond market closes taken at 1630 AEST previous local session)