RTTNews - The Australian stock market ended in positive territory on Wednesday, led by property, resource and bank stocks following an unexpected increase in GDP for the first quarter of 2009, which confirmed that Australia has avoided a technical recession after reporting a negative GDP in the December quarter. A Positive closing on Wall Street, amid choppy trading, on encouraging economic data also supported market sentiment, as more people are convinced that the worst for the global economy is over.
In the U.S., a report from the National Association of Realtors showed that pending home sales index rose 6.7% to 90.3 in April from a reading of 84.6 in March. Economists were expecting a modest 0.5% increase in the index for April. The increase came as homebuyers responded to very favorable market conditions.
The Dow finished up by 19.43 points or 0.2% at 8,741, the Nasdaq closed up 8.12 points or 0.4%, at 1,837 and the S&P 500 finished up by 1.87 points or 0.2% at 945.
The All Ordinaries Index opened unchanged from its previous close at 3,948 and briefly slipped into negative territory before recovering and moving above the unchanged line. The positive GDP report lifted market sentiment and the index surged past the psychological 4,000-mark, led by property, resource and bank stocks. The index ended the trading session at the day's high at 4,009, up 61.20 points, or 1.55%. The benchmark S&P/ASX 200 Index followed a similar trend and ended up at 4,017 with a gain of 61.90 points, or 1.56%.
On the economic front, the Australian Bureau of Statistics revealed that the country averted a technical recession as gross domestic product unexpectedly rose a seasonally adjusted 0.4% in the first quarter of 2009 compared to the previous quarter. That was significantly higher than the 0.2% quarterly contraction that analysts had been expecting after the revised 0.6% decline in the previous three months.
A separate report from the Australian Industry Group and Commonwealth Bank revealed that services sector activity contracted for the 14th consecutive month in May, although the pace slowed from that recorded in the first quarter. While the Performance of Services Index rose 0.1 points from April to 39.9, sales index fell to 39.1 from 39.9, and the capacity utilization decreased to 72.2% from 75.8%.
Crude oil prices gained $0.18 and ended at $68.73 a barrel in Asian trading. Light crude oil price for July delivery closed at $68.55 in New York Mercantile Exchange on Tuesday on increasing optimism about global recovery.
Property, resource and bank stocks were the major gainers.
In the property space, Mirvac Group soared 9.02%, Lend Lease gained 6.25% and Westfield Group rose 6.10%. GPT Group was in the spotlight , gaining 12.50% after the company announced sale of assets equivalent to A$560 million to restructure its core business model.
Resource stocks also advanced on increasing hopes of recovery and a rise in demand. BHP Billiton gained 0.90%, Iluka Resources rose 3.37%, and Rio Tinto advanced 3.77%. Among gold stocks, Sino Gold edged up 0.46% and New crest Mining gained 1.50%. However Lihir Gold bucked the trend and shed 0.20%.
Banking stocks also ended higher on positive GDP data for first quarter. ANZ Bank gained 2.38%, Commonwealth Bank added 1.29%, National Australia Bank rose 1.36% and Westpac Banking advanced 2.19%.
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