RTTNews - The Australian stock market ended in positive territory on Thursday following strength in commodity prices and underlying confidence about recovery prospects.
In the U.S, the major indices ended mixed after the Federal Reserve announced no change to its rate target and reiterated its commitment to the quantitative easing measures first announced in March. On the economic front, traders digested a report from the Commerce Department that showed that durable goods orders for May rose by 1.8%, matching a revised increase in April. The increase surprised economists, who had expected a decline of 0.9%. In a separate report, the Commerce Department said that new home sales slipped by 0.6 percent to an annual rate of 342,000 in May from a revised April rate of 344,000. Economists had expected sales to jump 2.3 percent to 360,000 from the 352,000 originally reported for the previous month.
The tech-heavy NASDAQ closed up by 27.42 points or 1.6% at 1,792 and the S&P 500 rose 5.84 points or 0.7% to 901, while the Dow declined by 23.05 points or 0.3% to close at 8,300.
The All Ordinaries Index opened slightly higher from its previous close at 3,808 and continued to trade in positive territory throughout the session on higher commodity prices. The index finally ended with a gain of 49.30 points, or 1.30%, at 3,851. The benchmark S&P/ASX 200 Index followed a similar trend and ended higher at 3,856, representing a gain of 49 points, or 1.29%.
Light sweet crude August delivery was little changed in the Asian session after ending down $0.57 at $68.57 per barrel in New York on Wednesday after the Energy Department's weekly inventory report showed a drop in crude stocks but a rise in gasoline supplies.
The International Monetary Fund or IMF, in its preliminary policy findings released yesterday, said the Australian economy would shrink by 0.5% this year, as domestic demand declines on lower commodity income, rising unemployment, and weak confidence. At the same time, the IMF expects the economy to recover by 1.5% next year, driven by government spending.
Material stocks led the gains following a rise in commodity prices in the international market. BHP Billiton gained 2.34%, Fortescue Metals advanced 2.17%, Oz Minerals rose 2.76% and Rio Tinto increased 4.42%.
Among oil stocks, Woodside Petroleum gained 1.62%, Santos advanced 1.07% and Oil Search rose 1.33%.
Gold stocks also ended mixed. While Lihir Gold gained 2.11% and Newcrest Mining advanced 1.80%, Sino Gold fell 0.57%.
Financials ended in positive territory on recovery hopes. ANZ Bank edged up 0.33%, Commonwealth Bank Australia advanced 1.40%, National Australia Bank added 0.23% and Westpac Banking gained 1.56%.
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