CANBERRA: The Australian sharemarket surged 1.8 per cent on Monday to close higher for a third consecutive day as rebounding oil prices boosted energy stocks.
Equity markets gained across the Asian region amid increased appetite for risk, adding to the positive local sentiment, in the wake of a 9 per cent jump in New York oil prices at the end of last week.
At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index was up 90.6 points, or 1.84 per cent, to 5006.6, while the broader All Ordinaries index was up 87.5 points, or 1.76 per cent, to 5057.1.
The gain pushed the benchmark back above 5000 points after it slumped below the key level earlier this month on its way to depths last reached in mid 2013. The bourse remains down for the year-to-date following the string of losses earlier in January.. The financial sector also contributed to the upward move today, with ANZ among the gainers with a 3.4 per rally.
“The ASX has had a very strong day, with banking stocks finally attracting buyers in big numbers.” IG markets analyst Angus Nicholson said. “It’s hard to fault investors wanting to get back into banking stocks at this point after they’ve lost so much in value this year.”
National Australia Bank’s released its monthly survey which showed business confidence declined slightly in December, but NAB chief economist Alan Oster said the results showed sentiment was “encouragingly resilient” in the face of recent wild financial market movements.
The energy sector advanced 1.84 per cent, with Woodside Petroleum up 3.81 per cent to $26.42 and Santos jumping 4.23 per cent to $2.96. Oil Search rose 2.6 per cent to $6.28.
Financials rose 2.55 per cent as each of the big four banks found favour with buyers. Westpac added 3.27 per cent to $30.91, National Australia Bank rose 3.12 per cent to $27.76 and Commonwealth Bank jumped 3.19 per cent to $79.
The broad-based market gains also included a 1.9 per cent rise in consumer discretionary stocks, a 1.85 per cent rally in utilities and increases of more than 1 per cent in healthcare and industrials.
Materials rose 0.83 per cent with BHP Billiton edging up 0.13 per cent to $15.28 while Rio Tinto lost 1.24 per cent to $39.16.
The oil price rally brought no joy to Qantas, which ended the session down 2.77 per cent at $3.86, while Telstra managed a 0.7 per cent rise to $5.58. Woolworths rose 1.67 per cent to $24.29 and Coles-owner Wesfarmers added 0.8 per cent to $42.11.
The sharemarket will be closed on Tuesday for the Australia Day holiday but markets will be looking toward a slew of economic and equity news later in the week.
Locally, the Australian Bureau of Statistics will release inflation data on Wednesday, with economists surveyed by AAP forecasting a CPI rise of 0.3 per cent in the December quarter for an annual rate of 1.6 per cent.
National Australia Bank shareholders will vote on the Clydesdale demerger on Wednesday, while Newcrest, Fortescue and Origin Energy are all due to release production reports later in the week. Overseas, the US Federal Reserve holds its first meeting this year on interest rates, with a closely-watched statement expected on Thursday morning Australian time.
