RTTNews - The stock market in Australia ended in positive territory on Wednesday taking cues from Wall Street, where better-than-expected consumer confidence helped indices surge ahead on hopes of recovery. Higher commodity, oil prices helped resource stocks, thereby lending support to the markets. However, investors sold shares in late trading to raise resources for participating in the capital-raising programme of ANZ Bank, thus limiting the overall gains.
U.S. consumer confidence showed a substantial improvement in the month of May, according to a report released by the Conference Board on Tuesday, with the consumer confidence index rising to its highest level in eight months. The report showed that the consumer confidence index rose to 54.9 in May from an upwardly revised 40.8 in April. Economists had expected the index to edge up to 42.6 from the 39.2 originally reported for the previous month. Earlier, a report released by Standard & Poor's revealed that home prices continued to show record declines in the first quarter of 2009, suggesting that the recent signs of revival in the housing market had not yet resulted in a turnaround in prices.
Traders largely shrugged off the data, however, citing the lagging nature of the numbers and choosing to focus on the encouraging consumer confidence data. The Dow closed up 196.17 points or 2.4% at 8,473, the Nasdaq rose 58.42 points or 3.5% to 1,750 and the S&P 500 closed up 23.33 points or 2.6% at 910.
The All Ordinaries Index, which closed Tuesday's trading session at 3,782, opened higher at 3,791 and continued to surge ahead to 3,828 in early trading on positive cues from Wall Street and higher commodity prices. However, the traders preferred to sell stocks in order to participate in the A$2.85 billion capital-raising programme of ANZ Bank, dragging down the index from the day's high. Amid alternate bouts of selective buying and selling, the market ended with a gain of 13.70 points, or 0.36%, at 3,795. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3,801 with a gain of 12.7 points or 0.3%.
Markets largely shrugged off a slew of economic data released during the day. The Australian Bureau of Statistics stated that the value of construction work done declined a seasonally adjusted 3.7% sequentially in the March quarter, after a revised 2.3% rise in the December quarter. Survey results released by Westpac Bank and the Melbourne Institute revealed that economic activity remained anemic during March. The group's leading economic index for March increased by just 0.3% compared to February, and was 5.1% lower than its level of one year ago. A report released by the Australian Department of Employment and Workforce Relations revealed that the number of job vacancies for skilled workers in Australia declined in May by 7.0% from April. The index stands at 35.1, and represented a 62.6% decline in skilled vacancies compared to a year earlier. Decreases were recorded in 16 of the 18 occupational groups surveyed, the report revealed.
Resource stocks advanced, led by higher commodity prices in the international market. BHP Billiton advanced 1.05%, Orica gained 2.02% and Oz Minerals surged 6.67%. However, Rio Tinto declined 1.67% on concerns about its deal with China Aluminum Company.
Oil stocks also advanced after crude oil prices continued to move northward. Crude oil price for July delivery closed higher by 26 cents at $62.71 a barrel in Asian trading. On Tuesday, oil prices climbed to a new six-month high as traders viewed a jump in U.S. consumer confidence as a signal for an economic rebound and increased energy demand. New York's main futures contract, light sweet crude for delivery in July, rose 78 cents to end at $62.45.
Woodside Petroleum added 0.28%, Santos gained 1.54% and Oil Search advanced 2.08%.
Stocks across the sectors witnessed selling as investors raised funds to participate in the capital-raising programme of ANZ Banking. The bank is planning to raise $2.85 billion through share placement. The bank intends to utilize the proceeds from the issue for funding the potential acquisition of the assets of Royal Bank of Scotland and for other corporate purposes.
Among the financials, Commonwealth Bank of Australia lost 0.90%, Macquarie Group declined 1.02%, and Westpac Banking shed 1.78%. National Australia Bank, however, bucked the trend and ended higher by 0.46%.
Mixed trend was witnessed among the gold stocks. While Lihir Gold declined 0.94%, New crest Mining added 0.75% and Sino Gold advanced 0.64%.
Among retailers, David Jones advanced 1.98% and Harvey Norman gained 2.80%. Wesfarmers remained unchanged from previous close, while Woolworths declined 1.28%.
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