SYDNEY: Australian stocks seized back early losses and rallied almost 1 percent on Thursday as better-than-expected jobs data encouraged investors to shrug off dwindling chances of an imminent rate cut to buy blue chip yield stocks.
The ASX dipped at the open on concerns the U.S. Federal Reserve would lift rates soon, but by 0111 GMT, the S&P/ASX 200 index was up 0.9 percent or 51.1 points to 5844.5, its biggest gain since Feb. 18, following news Australian employment grew slightly in February, signalling that the economy is stronger than expected although curbing the chances of a rate cut very soon.
“Probably the RBA won’t cut, they’re pretty conservative,” said Quay Securities head of trading Tristan K’Nell, referring to figures which showed the unemployment rate fell to 6.3 percent from 6.4 percent, while 15,600 more people got jobs.
“(The index) has run a little bit too hard. It might be a little bit of short-covering after a few down days. Realistically, there’s not a lot of incentive and I’m expecting a pullback,” K’Nell added.
Banks led the index higher, with Westpac Banking Corp up 1.5 percent and Commonwealth Bank of Australia, Australia and New Zealand Banking Group and National Australia Bank all up about 1 percent.
