Stocks Soar On Hopes Of Steady Rates
The Age
Thursday June 2, 2005
THE sharemarket has reversed Tuesday's losses to finish sharply higher, with dampened interest-rate speculation boosting the banking sector.
Investors shrugged off a negative lead from Wall Street, and the market found further support from firmer energy and resource stocks. The benchmark S&P/ASX 200 Index soared 41.4 points to 4147.8. It now stands 5.1 per cent above its year low on May 4 and is less than 3 per cent from its record high reached on March 21. Banking and finance companies led the way. ABN Amro senior equities adviser Tony Russell said the sector had received a boost from the gross national product data, which showed the economy had grown at a moderate pace in the first quarter. "Speculation on further interest rate rises has probably been dampened a bit now," he said. "That is probably a better business scenario for the banking stocks." National Australia Bank's head of market economics, Rob Henderson, said: "No rate increases could be justified against a backdrop of drought and slowing spending." National Australia Bank was 33 ? firmer at $31.78, Commonwealth rallied 74 ? to $37.79 and ANZ climbed 48 ? to $21.93. Westpac fell 22 ? to $19.42 after going ex dividend and Macquarie Bank jumped $1 to $51.35. David Jones rose 4 ? to $1.84 as the chain launched its clearance sales. Coles Myer moved up 10 ? to $9.22 and Woolworths climbed 28 ? to $16.35. Energy stocks rose as the oil price continued its advance. The spot price was at $US52.20 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 4.20pm. Woodside Petroleum was 66 ? higher at $25.41, Caltex gained 49 ? to $15.59 and Santos rose 28 ? to $10.36. Firmer base metal prices helped lift the big materials stocks. BHP Billiton closed 17 ? higher at $16.85 and Rio Tinto put on 65 ? to $43.22. Energy Resources of Australia eased 20 ? to $10.90. The company was fined $150,000 over a series of contamination incidents at its ranger mines in Kakadu National Park. Webjet rose 2 ?, or 17 per cent, to 13.5 ? after the online travel agency reported that May sales had climbed 450 per cent to $67.3 million from a year earlier. -- AAP, BLOOMBERG
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