The share market has posted its strongest session of 2017, as international investors joined the spending spree that followed recent heavy falls.
The benchmark S&P/ASX200 index gained 99.3 points, or 1.75 per cent, to 5783.8 points, its strongest performance since November 10, when the market surged after the election of US President Donald Trump.
After a positive lead from Wall Street, sentiment was further buoyed by better-than-expected retail spending figures, and the RBA kept interest rates at a record low, as expected.
But the Australian dollar slid after the release of the RBA’s statement on rates, as it failed to deliver the hawkish stance some in the market had predicted.
After hitting a high of 76.73 US cents after the release of the retail numbers, the local currency fell back to be at 76.17 US cents at 1700 AEST.
Retail spending rose 0.6 per cent in May, well ahead of market expectations, and continuing on from strong growth in April.
CMC Markets chief market strategist Michael McCarthy said every major sector of the share market gained value, with financials leading the way.
All four big banks bounced back from recent heavy falls, with Westpac gaining 3.3 per cent, NAB rising 2.8 per cent, ANZ adding 2.2 per cent and Commonwealth Bank was 1.9 per cent higher.
Mr McCarthy said large overseas investors were joining bargain hunters in the local market.
“We’ve seen some significant macro buying today, the futures index has surged and we are well above the average daily turnover, so it’s pretty clear that’s where the pull is coming from and it does suggest some international participation,” he said.
BHP was the best of the miners, up 2.3 per cent, while Rio Tinto gained 0.8 per cent and Fortescue Metals was steady.
Looking ahead, Mr McCarthy said the volatility index has eased after being on the rise for some time, suggesting there is a comfort with the current level of the market.
“We’re seeing considered support for the telcos, consumer discretionary, consumer staples – all sectors that are exposed to different themes, so it’s not about thematic investing – its top-up buying,” he said.
ON THE ASX:
* The benchmark S&P/ASX200 was up 99.3 points, or 1.75 per cent, at 5783.8 points.
*The broader All Ordinaries index was up 92.1 points, or 1.61 per cent, at 5819.6 points.
* The September SPI200 futures contract was up 105 points, or 1.86 per cent, at 5,740 points.
* National turnover was 2 .2 billion shares, at a value of $6.3 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
CURRENCY ASK BID PREVIOUS
AUD/USD 0.7619 0.7614 0.766
AUD/JPY 85.98 85.91 86.83
AUD/EUR 0.6699 0.6695 0.6739
AUD/NZD 1.0457 1.0447 1.0499
AUD/GBP 0.5881 0.5877 0.5921
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,225.42 per fine ounce, down from $US1,236.40 per fine ounce on Monday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.8479pct, from 1.9053pct
* CGS 4.75pct April 2027, 2.5648pct, from 2.6079pct
Sydney Futures Exchange prices:
* September 2017 10-year bond futures contract at 97.38 (implying a yield of 2.62pct), from 97.335 (2.665pct) on Monday
* September 2017 3-year bond futures contract at 98.07 (1.93 pct), from 98.01 (1.99pct).
(*Bond market closes taken at 1630 AEST previous local session)
