PERTH: A resources-led rally pushed the Australian sharemarket nearly 2 per cent higher as thin trade amplified a big jump in energy and mining stocks.
The local market was also in top gear after disappointing US jobs data was seen as dampening the argument for a near-term US interest rate rise, sparking a strong performance in gold stocks.
At the 4.15pm (AEDT) official market close, the benchmark S&P/ASX200 index rose 98.5 points, or 1.95 per cent, to 5150.5, while the broader All Ordinaries index added 94.9 points, or 1.86 per cent, to 5184.1.
Trading volumes were around 60 per cent lower than the 30-day moving average, with New South Wales, the ACT, Queensland and South Australia all enjoying a public holiday. The strong lift in the Australian market was mirrored by Hong Kong’s Hang Seng index and Tokyo’s Nikkei.
US non-farm payrolls, which were released on Friday, missed forecasts substantially and sparked wild swings on Wall Street, which managed to climb higher. The soggy numbers dampened expectations of a US Fed rate hike this year, just a week after Fed chair Janet Yellen spelled out her clearest arguments for an interest rate lift-off in 2015.
The Australian dollar has been trading in a tight range following the US jobs figures, holding around the mid-US70c level, as traders sit on the sidelines ahead of Tuesday’s RBA board meeting, where it is widely tipped to hold the cash rate steady.
“The one possible risk for the Australian dollar coming out of the cash rate is if the RBA raises concerns about external factors,” OANDA senior trader Stephen Innes said. “The market would interpret this as dovish as it would be seen as potentially opening the door for possible rate cuts.”
The prospect of cheaper credit for longer, a rush of investors into safe-haven gold and favourable movements in commodity prices all combined to boost the local sharemarket.
Energy stocks were leading the market higher with oil and gas shares surging following a bounce in global crude prices. US Nymex crude gained 1.8 per cent, while global benchmark Brent crude tacked on 0.9 per cent before the weekend as the number of operational oil rigs in the US fell at a faster clip.
