RTTNews - The Australian stock market ended higher on Friday, led by resource stocks on higher commodity prices. A positive closing on Wall Street, where easing concerns about higher bond yields, higher commodity prices, and better-than-expected industrial output data from Japan lifted market sentiment.
In the U.S., easing concerns about rising bond yields, the $26.0 billion seven-year note auction conducted by the Treasury Department in the U.S. attracted a high-yield of 3.30% while seeing modestly strong demand, with the bid-to-cover ratio coming in at 2.26. A report from the Commerce Department showed that orders for durable goods jumped 1.9% in April following a downwardly revised 2.1% decrease in March. Another report from the Commerce Department revealed that new homes sales edged up 0.3% to an annual rate of 352,000 in April from a downwardly revised 351,000 in March. A separate report from the Labor Department showed that initial jobless claims in the week ended May 23rd came in at 623,000. This was down 13,000 from a revised mark of 636,000 in the previous week. However, continuing claims, which measure the number of people receiving ongoing unemployment help, climbed 110,000 to 6.788 million.
The Dow closed up 103.78 points or 1.3% at 8,404, the Nasdaq closed up 20.71 points or 1.2% at 1,752 and the S&P 500 closed up 13.77 points or 1.5% at 907.
After opening unchanged from its previous close at 3,754, Australia's All Ordinaries Index surged sharply higher to 3,780 in initial trading, led by banks, on positive cues from Wall Street. The index continued its northward march following the release of better-than-expected industrial production data from Japan, before closing at 3813, with a gain of 59.40 points, or 1.58%. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 3,818, with a gain of 62 points, or 1.65%.
On the economic front, the Reserve Bank of Australia revealed that credit issued to private borrowers in the country increased a seasonally adjusted 0.1% in April month-over-month. Year-over-year, private sector credit rose 4.6% in April, the bank noted.
Commodity prices led the gains in the market. A measure of six commodities traded in London Metals Exchange rose 1.3% on Thursday. Among the commodities, copper prices advanced 1.8%, while nickel and zinc added 0.8% and 1% respectively.
Resource stocks advanced on higher metal prices. BHP Billiton advanced 1.88%, Iluka Resources added 1.60%, Orica gained 1.41%, Oz Minerals surged 4.17% and Rio Tinto edged up 0.86%.
Crude oil prices ended 21 cents higher at $65.29 in Asian trading. Light crude oil price for July delivery closed at $65.08 in New York Mercantile Exchange, following an unexpected drop in weekly inventory data in the U.S. and a decision by OPEC not to tinker with output rates.
Woodside Petroleum added 0.84%, Santos advanced 1.46% and Oil Search gained 2.06%.
Banking stocks advanced as concerns about high yields eased. ANZ Bank gained 3.38%, Commonwealth Bank advanced 3.51%, National Australia Bank rose 1.81% and Westpac Banking increased 2.23%. Macquarie Group surged 3.63% after stating that it is planning to acquire an energy advisory firm based in Canada for about US$132 million in cash and stock transaction to boost its operations in the energy sector.
Gold stocks also moved higher, helped by higher bullion prices. Lihir Gold advanced 1.55%, New crest Mining added 1.85% and Sino Gold rose 2.19%.
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