SYDNEY, Nov 22: Australian shares rose 1.1 percent on Friday morning, snapping a 4-session losing streak as upbeat U.S. Economic data added to growing expectations the Federal Reserve is unlikely to scale back its stimulus until early next year.
Banks underpinned the market, recovering from a sell-off in previous sessions. The Commonwealth Bank of Australia rose 0.8 percent while Westpac Banking Corp jumped 1.3 percent. Midcap bank Bendigo and Adelaide Bank Ltd climbed 1.6 percent.
The early momentum was set up by a strong night on Wall Street where the Dow Jones Industrial Average closed above 16,000 on Thursday for the first time, helped by data pointing to a slowly improving labor market and subdued inflation.
The S&P/ASX 200 index rose 55.4 points to 5,343.7 by 0057 GMT. The benchmark fell 0.4 percent on Thursday and is set to lose 1.1 percent for the week, its biggest weekly drop in seven weeks.
This week’s selling has been variously attributed to investors raising cash for IPOs and offshore hedge funds cutting their exposure, said Shawn Hickman, managing director at Market Matters.
‘I’m nervously bullish on the market, going into Christmas statistically, it’s a very very dangerous time to be short, particularly because it’s a strong time for the market.’
The benchmark index has added 14.9 percent so far in 2013, peaking on October 28 at 5,457.3 points. Since then, the index has pulled back to hover at one-month lows as investors fretted over the timing of the Fed’s stimulus taper.
On Friday, the mood was sufficiently ebullient to allow a broad-based rise.
Top tier telecommunications company Telstra Corporation Ltd
Added 0.7 percent while consumer retail staple Wesfarmers Ltd rose 0.6 percent.
Among miners, BHP Billiton Ltd notched 0.5 percent and Rio Tinto Ltd added 0.8 percent after as a short-term shortage of refined metal offset worries about a fall in China factory activity.
In a client note, Credit Suisse research analysts Damien Boey and Hasan Tevfik said equities faced some upside risks and forecast the local bourse will hover at 5,600 by the end of 2014.
‘2014 will be a battle between uninspiring valuations and sluggish profits versus accommodative monetary policy and rising cash-flows,’ they said.
Stonewall Resources soared 42.3 percent to A$0.19, a one-year high, after the company said it has entered into a share sale agreement with Shandong Qixing Iron for A$124.39 million.
Goodman Group Pty Ltd, an Australian industrial property development company, jumped 1.3 percent after reaffirming its full year earnings guidance of A$594 million.
Goodman Fielder Ltd slumped 3.4 percent after the Australia’s largest food manufacturer downgraded its fiscal year earnings due to a spike in milk prices and increased marketing costs.
New Zealand’s benchmark NZX 50 index slipped 0.1 percent to 4,812.3.
(agencies)
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