Thursday, 6 October 2011

Stocks gain most in almost three years

Stocks gain most in almost three years

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On Thursday 6 October 2011, 17:02 EST
Australian shares leapt the most in almost three years as investor sentiment improved on renewed optimism a solution is near at hand for the Eurozone debt crisis.
The local market opened more than one per cent stronger after Wall Street surged for its second straight day, then eased slightly after midday but soared in the last hour of trading.
By the close, the benchmark S&P/ASX200 index had reached its highest level since September 21, rising 143.4 points,or 3.65 per cent to 4,069.9 and the broader All Ordinaries index up 139.6 points, or 3.5 per cent, at 4,132.1.
That was the biggest increase for the All Ords since November 25, 2008.
The December share price index futures contract was up 137 points at 4,072, with about 51,255 contracts traded.
Intersuisse director of equities Andrew Sekely said the local market had taken its lead from positive sentiment about the eurozone debt crisis on Wall Street overnight, and went on to do better than the US market on Thursday.
"It's a follow-through (from) two good days in the US and the market will soon be oversold," Mr Sekely said.
"Investors are hoping that that strength we saw in the US and the measures that hopefully will be taken (in Europe) will continue to drive the market higher over there."
But he did not expect the market to maintain a rise of such proportions on Friday.
Broad-based gains were felt across the board, with all sectors closing higher and only seven stocks on the ASX 200 - including Foster's Group, which dropped two cents to $5.27 - falling.
Materials, which were among those sectors hardest hit by market declines in recent weeks, ended the day the strongest, rising 4.3 per cent.
But Mr Sekely said they were still a long way from recovering all of the recent heavy losses on the back of weak commodity prices, particularly over the past fortnight.
The materials sector also benefited from a rally on overseas metal markets on Wednesday, with copper rising in overnight trade for the first time in six sessions, supported by a weaker US dollar.
Among the miners, BHP Billiton advanced 3.3 per cent, or $1.17, to $36.30, while fellow miner Rio Tinto gained 4.9 per cent, or $2.98, to $63.28.
Atlas Iron climbed 20 cents, or 7.1 per cent, to $3.00, while Fortescue Metals gained 30 cents, or 7.1 per cent, to $4.55.
There was also solid support for financials, with all the major retail banks gaining more than four per cent. National Australia Bank was the strongest stock on the ASX 20, soaring five per cent, or $1.09, to $22.87.
Energy stocks also finished 4.1 per cent firmer after crude oil prices rallied on Wednesday after a significant, unexpected drop in US oil stockpiles.
Woodside Petroleum ended 4.7 per cent, or $1.54 higher, at $34.34, while Santos closed 24 cents, or 2.1 per cent, stronger at $11.60.
Uranium miner Paladin Energy was the best performing stock on the S&P/ASX100 index, soaring 16.2 per cent, or 19 cents, to $1.36.
The worst performer on the same index was Treasury Wine Estate, which fell two cents to $3.88.
The spot price of gold was $US1,646.4, up $US22.65 from Wednesday's local close of $US1,623.75.
Mr Sekely said trading volumes were better than they had been in recent days, with a turnover of 2.12 billion shares worth $5.92 billion.

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