RTTNews - The Australian market ended in positive territory for the third successive day on Thursday, following sharp gains on Wall Street. The buying momentum accelerated following the release of a report that showed that the Chinese economy expanded at a bigger-than-expected rate in the second quarter. Energy and bank stocks led the gains on optimism about growth prospects.
stocks ended sharply higher, led by positive results from chipmaker Intel (INTC) and restaurant operator Yum! Brands (YUM) raising hopes of revival in consumer spending. A smaller-than-expected drop in industrial output and the minutes of the June FOMC meeting helped sustain the tempo of the rally throughout the session. The minutes of the June FOMC meeting showed that the GDP estimates were revised to show a smaller than expected decrease in 2009 and a bigger than expected increase in 2010. At the same time, the Fed said it expects the unemployment rate to come in higher than previously estimated based on the incoming employment data.
Earlier, a Labor Department report revealed that consumer prices saw a 0.7% increase in June compared to the previous month. Economists had projected an advance of about 0.6%. Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950. In a report, the New York Fed said that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating. With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The Dow closed up by 256.72 points or 3.1% at 8,616, the Nasdaq climbed 63.17 points or 3.5% to 1,863, and the S&P 500 rose 26.84 points or 3% to 933.
The All Ordinaries Index opened unchanged from its previous close at 3,918 and surged higher in early trading on positive cues from Wall Street, where the major indices posted sharp gains on Intel results. Following the initial spurt, the market held on to the gains and moved sideward for the rest of the session. The index ended the day with a gain of 70.3 points, or 1.79% at 3,988. The benchmark S&P/ASX 200 Index followed a similar trend and ended at 3,996, representing a gain of 1.81% or 71.10 points.
Light sweet crude oil for August delivery ended the Asian trading session at $60.34, down 20 cents, after ending Wednesday's session in New York at $61.54, up $2.02 a barrel boosted by a larger-than-expected decline in crude oil inventories in the previous week.
Energy stocks led the gains following the sharp rise in crude oil prices in the international market. Woodside Petroleum gained 1.25%, Santos advanced 2.58% and Oil Search rose 2.46%.
Metal stocks ended higher on higher commodity prices and expectations of higher demand. Rio Tinto surged up 4.63%, BHP Billiton advanced 1.78%, Fortescue Metals rose 4.44%, Iluka Resources gained 3.05%, and Mincor Resources increased 4.19%. Macarthur Coal surged 6.10%.
Gold stocks ended in positive territory following A rise in bullion prices. Lihir Gold advanced 1.04%, Newcrest Mining rose 2.45% and Sino Gold Mining surged up 4.60%. Sino Gold revealed that its production increased 51% in the recently concluded June quarter.
Banking stocks advanced on optimism about a recovery. ANZ Bank added 0.91%, Commonwealth Bank Australia advanced 1.52%, National Australia Bank rose 2.57%, and Westpac Bank increased 1.10%.
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