SYDNEY: The prospect of cheaper credit for longer has sent the Australian sharemarket on a five-day rally, as investor confidence is boosted by further dovish signs from the US Federal Reserve.
The market posted its best weekly performance in almost four years, and first five consecutive sessions of gains since June, thanks to a resurgence of resources stocks on the local exchange
At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 added 69.3 points, or 1.33 per cent, to 5279.7, while the broader All Ordinaries rose 67.8 points, or 1.29 per cent, to 5309.2.
Today’s close puts the local market up 228 points, or 4.5 per cent, over the five sessions, to reach its strongest point since mid-August.
Since last Tuesday, when the market plunged nearly 4 per cent in one day, the ASX has added around $100 billion in value, according to IG analyst Evan Lucas.
Local equities were following in the wake of US gains, with Wall Street up almost one per cent, after the release of the minutes of the US Federal Reserve September policy meeting, at which it decided against raising its key interest rate.
Fed officials held off on raising short-term rates at the meeting because of nagging worries about when inflation would return to 2 per cent after running below their official target for more than three years.
The market’s pricing for a US December rate hike dropped to less than a 40 per cent chance.
The Australian dollar surged as the US dollar slipped on the news.
Australian traders and investors will be curious about whether this could be the start of an ASX200 uptrend now that resource stocks are lifting and market conditions are providing adequate support for the financial sector, while volatility is waning, Rivkin chief executive Scott Schuberg said.
