The stock market in Australia ended higher on Thursday, led by financials stocks on expectations of stability in the financial sector. Comments from the RBA that the nation's banking system is the strongest also propped up the financial stocks. Positive closing in Wall Street on Wednesday also lifted the market sentiment.
On Wednesday, the Dow closed up 89.84 points or 1.2% at 7,750, the Nasdaq closed up 12.43 points or 0.8% at 1,529 and the S&P 500 closed up 7.63 points or 1% at 814.
In Asian trading, crude oil gained 1.04% in electronic trading. Crude oil futures settled Wednesday's session in New York at $52.77 a barrel, representing a decline of $1.21, with the drop attributed to the EIA's weekly inventory report that showed another week of a build-up in crude oil stockpiles.
The benchmark S&P/ASX 200 Index gained 37.3 points, or 1.03%, to 3,647, and the broader All Ordinaries Index advanced 40.10 points, or 1.13%, to 3,586.
On the economic front, the Reserve Bank of Australia noted that the nation's banking system is one of the world's strongest and is well-positioned to weather the global economic crisis. In its semi-annual Financial Stability Review issued Thursday in Sydney, the RBA noted that that while the global financial system continues to experience significant stress, the Australian Banking system has performed well over recent times.
Meanwhile, the Conference Board's Leading Economic Index for Australia registered a decline of 0.6% in January and now stands at 111.2. The Board's Coincident Index, which measures current activity, increased 0.6% for the period and currently stands at 13.1. The private sector organization reported Thursday that the Leading Index dropped for the fifth straight month, with building approvals, stock prices and the yield spread the main contributors, offsetting gains in the real money supply and rural goods exports.
The major banks ended mostly higher following the RBA's semi-annual review. Investment bank Macquarie Group rose 4.20%. Australia and NZ Bank gained 3.21%, National Australia Bank advanced 3.09% and Westpac Bank moved up 0.36%. However, Commonwealth Bank of Australia declined 1.87%.
In the resources sector, mining conglomerates advanced on higher commodity prices. BHP Billiton gained 1.89% and rival Rio Tinto advanced 1.52%. BHP Billiton said it sold $4.3 billion of fixed interest rate medium term bonds in two tranches in the Eurobond market overnight, and announced the commencement of oil and gas production at its 100,000 barrels per day Shenzi project in the Gulf of Mexico.
Gold miners gained after gold closed higher overnight, snapping a three-day losing streak. Newcrest Mining rose 2.12% and Lihir Gold gained 1.25%. However, Sino Gold fell 2.31%.
Among oil stocks, Woodside Petroleum advanced 2.88%, and Santos rose 2.88%. However, Oil Search declined 0.56%.
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