Australian Market Ends In Positive Territory On Recovery Hopes

on July 24 2009 4:50 AM

RTTNews - The Australian market ended in positive territory on Friday following cues from Wall Street where the Dow Jones crossed the 9,000-mark for the first time since January on increasing optimism about recovery later in the year. Mining stocks advanced on expectations of higher demand.

In the U.S., encouraging economic numbers on home sales and weekly jobless claims helped stocks stage a substantial rally in the previous session, as hopes of recovery in the later part of the year gained a further boost. Data revealed by the National Association of Realtors showed that existing home sales increased for the third consecutive month in June. Existing home sales rose by 3.6% to an annual rate of 4.89 million units in June from a downwardly revised rate of 4.72 million in May. A separate report from the Labor Department showed that jobless claims rose slightly less than economists had expected.

First-time claims in the week ended July 18th rose to 554,000 from the previous week's revised figure of 524,000. Economists had expected jobless claims to increase to 557,000 from the 522,000 originally reported for the previous week.

Better-than-expected results from 3M (MMM), Ford (F), Wyeth (WYE), McDonald's (MCD), AT&T (T) and Qualcomm (QCOM) as well as a rise in commodity prices also supported the upside

The Dow closed up by 188.03 points or 2.1% at 9,069, the Nasdaq advanced by 47.22 points or 2.5% to 1.974 and the S&P 500 rose by 22.22 points or 2.3% to 976.

The All Ordinaries Index opened slightly higher at 4,088 compared to its previous close at 4,073 and surged higher following sharp gains in Wall Street overnight on increasing optimism that the worst for the U.S economy is over and can start recovering from the later part of the year. After initial spurt above the 4,100-mark, the market stabilized and trimmed some of the gains as traders exercised caution amid weak economic fundamentals and preferred to lock gains. The Index traded above the unchanged line throughout the session and ended with a gain of 24.70 points, or 0.61% at 4,097.30. Tthe benchmark S&P/ASX 200 Index also followed a similar trend and ended at 4,090, representing a gain of 25.70 points, or 0.60%.

Light sweet crude oil for September delivery ended the Asian trading session at $67.08, down $0.08 from its previous close in New York at $67.16 a barrel on Thursday.

Metal stocks gained following rise in commodity prices in the international market. BHP Billiton gained 1.11%, Rio Tinto edged up 0.10%, and Gindalbie Metals surged 9.09%. However, Fortescue Metals bucked the trend and shed 1.81% on profit taking.

Oil stocks ended mixed. While Woodside Petroleum advanced 1.81% on higher crude oil prices, Oil Search Ltd and Santos slipped 0.41% each respectively on profit taking.

Banking stocks also showed mixed response with National Australia Bank edging down 0.36%. However, the other banks ended in positive territory on increasing optimism about recovery. ANZ Bank gained 1.07%, Commonwealth Bank rose 2.11% and Westpac Banking advanced 2.45%.

Macquarie Group shares ended weaker, after commencing trading after halt on Thursday, following news that Macquarie Airports took over the management control after Macquarie Group agreed to relinquish control. Macquarie Group lost 4.31% and Macquarie Airports slumped 6.82%.

Gold stocks ended mixed on profit taking. While Lihir Gold sfell 1.75 % and Sino Gold shed 0.56%, Newcrest Mining managed to end in the green with a gain of 0.13%.

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