The stock markets in Australia ended higher on Friday, taking cues from Wall Street, where the major indices rose for the third day in succession on hopes of stability in the global economy. Pledge for about $1.1 trillion in loans and guarantees by the G20 leaders in London and a relaxation in the mark-to-market accounting rules for banks also helped the markets post gains, although the economic indicators are still implying weakness.
On Thursday, the Dow closed up 216.48 points or 2.8% at 7,978, the Nasdaq closed up 51.03 points or 3.3% at 1,604 and the S&P 500 closed up 23.30 points or 2.9% at 834.
In Asian trading, crude oil ended down $0.73 at $51.91 a barrel in electronic trading. Light sweet crude for May delivery closed up $4.25 at $52.64 a barrel on the New York Mercantile Exchange on Thursday, after hitting an intra-day low of $48.45 and a high of $52.87, on improved demand prospects amid hopes the G-20 summit will help pull the world out of the economic crisis.
The benchmark S&P/ASX 200 index rose 1.54%, or 56.60 points, to 3,736 and the broader All Ordinaries index advanced 52.90 points to 3,674.
On the economic front, the latest Australian Industry Group - Commonwealth Bank Performance of Services Index or PSI data revealed that Australian services sector activity remained weak in March. The seasonally adjusted Australian PSI rose by 3.4 points to 35.6 in March, still well below the 50.0 points level separating expansion from contraction.
Resource stocks advanced after a measure of six commodities advanced 2.9% on the London Metals Exchange. Positive economic data from China, where the Purchasing Managers' Index rose to a seasonally adjusted 52.4 in March from 49 in February also propped up resource stocks on expectations of rising demand from China, the major export destination for Australian resources.
Financials gained on expectations that change in accounting rules might improve the profits of the banks. Among banking stocks, Commonwealth Bank of Australia advanced 2.11%, ANZ Banking Group surged up 5.45%, and National Australia Bank advanced 5.48%. Westpac rose 3.02%, and investment bank Macquarie Group gained 4.97%.
In the resources sector, index leader BHP Billiton gained 3.68%, and Rio Tinto advanced 2.93%. Among energy stocks, Woodside moved up 1.79%, Oil Search rose 4.33%, and Santos gained 3.38%.
Gold miners, however, declined after gold closed lower on Thursday. Lihir Gold lost 6.60%, Sino Gold slipped 0.36%, and Newcrest Mining declined 7.11%.
In the retail sector, David Jones lost 1.05%, Woolworths slipped 0.68%, and Coles' owner Wesfarmers decreased 1.42%.
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